Oregon Volunteer Lawyers for the Arts

In Defense of Art

In Defense of Art is the official blog of Oregon Volunteer Lawyers for the Arts

Fine Art Consignments: What to know when selling “fine art” in Oregon

by Sean Clancy esq.

When you bring your art to some third party to sell, that is called a consignment. Oregon law provides powerful, unwaivable, rights for artists (or their heirs) who sell their fine art through third parties. This article addresses important definitions contained in Oregon’s fine art consignment statute, what loss or damage may be covered by the law, when payments must be made after a sale, ownership issues, purchaser information, and necessary contract terms. Notably, for the consignment of fine art (including sales and exhibitions), there MUST be a written contract especially if the dealer wants any fee, commission or other compensation. If the consignment agreement isn’t written down with the required statutory terms, then the artist (or his/her heirs) is entitled to a $100 penalty, plus actual and incidental damages. Additionally, without a written contract, any obligation to compensate the dealer is voidable. Finally, it is important to know that the winning party in any legal action under Oregon’s fine art consignment statute is entitled to reasonable attorney fees.

Important definitions
If your situation doesn’t meet all of these definitions, then Oregon’s fine art consignment laws may not apply:

Fine Art means
“(a) An original work of visual art such as a painting, sculpture, drawing, mosaic or photograph;
(b) A work of calligraphy;
(c) A work of original graphic art such as an etching, lithograph, offset print, silk screen or other work of similar nature;
(d) A craft work in materials including but not limited to clay, textile, fiber, wood, metal, plastic, glass or similar materials; or
(e) A work in mixed media such as a collage or any combination of the art media described in this subsection.”
Note that some of these categories are fairly broad. If the artwork doesn’t fit this list, however, then it isn’t considered fine art under this particular Oregon law.

Art Dealer is defined very broadly as “an individual, partnership, firm, association or corporation, other than a public auctioneer, that undertakes to sell a work of fine art created by another.” So almost anyone is deemed an art dealer if they sell or display someone else’s fine art for sale.

Artist means “the creator of a work of fine art or, if the artist is deceased, the artist’s personal representative, heirs or legatees.” So anywhere that the term “artist” is used in this article, realize that the artist’s heirs could be included as well.

And finally, Consignment means “delivery of a work of fine art to an art dealer for the purpose of sale or exhibition, or both, to the public by the art dealer at other than a public auction.” This includes putting your art in a restaurant of coffee shop if it is for sale. Delivery of fine art is not a consignment if it is a direct sale and the artist is paid before delivery, even if the purchaser is an art dealer that intends to exhibit the work for re-sale.

Liability for loss or damage
An art dealer is liable for the loss of or damage to the work of fine art while it is in the dealer’s possession if the loss or damage is caused by the failure of the dealer to use the highest degree of care. The value is established in a written agreement between the artist and dealer before the loss or damage or, if no written agreement exists then fair market value.

Payment
The proceeds from a sale of a work of fine art on consignment must be paid to the artist within 30 days of receipt by the dealer unless the artist expressly agrees otherwise in writing. Installment payments are allowed but have special requirements.

Ownership/Trust Relationship
The artist’s rights to the artwork are superior to those of the art dealer. This means that dealer’s creditors cannot collect on the art or artist’s proceeds from a sale to satisfy the dealer’s debts. The fine art is treated like what is known as “trust property,” and the dealer is “trustee” of the property until the art is sold to a bona fide third party. Once sold, the dealer is then “trustee” of the proceeds of sale. If the dealer purchases the art, the art remains trust property until the dealer pays the artist. However, aside from the duties imposed by the statute, an art consignment does not give rise to a general trust or fiduciary relationship and a separate trust account is not required. We recommend that when you deliver your art to be displayed that you have the gallery or owner of the location where the work will be displayed sign the inventory list of what you are delivering for sale so every knows and agrees what you have delivered and all parties have a record (see Consignment Contract Terms below).

Art Purchaser Information
For sales above $100, the dealer must also be prepared to deliver to artist the name and address of any purchaser, upon written demand. Failure to do so entitles artist to an injunction and money damages equal to three times the retail value of the work.

Necessary Consignment Contract Terms
Finally, under ORS 359.220 every art consignment contract requires:
“(1) The retail value of the work of fine art;
(2) The time within which the proceeds of the sale are to be paid to the consignor [artist], if the work of fine art is sold;
(3) The minimum price for the sale of the work of fine art; and
(4) The fee, commission or other compensation basis of the art dealer.”

Oregon law places the obligation to have a written agreement clearly on the art dealer. If there isn’t a written contract including the terms listed, the dealer could be liable to the artist for $100 plus actual and incidental damages. Further, the artist’s obligation to compensate the dealer for the sale is voidable under ORS 359.250 and the winner in any legal action is entitled to attorney fees under 359.255. This means you can recover your attorney fees if you need to take the dealer to court over a fine art consignment.

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Thanks to Kohel Haver and Lydia Loren for their thoughtful feedback on this article!