In a principal-agent relationship, the agent (in the case of art, this usually means a gallery) is allowed to make legal transactions for which the responsibility falls upon the principal (in relation to a gallery, this usually is an artist). While most galleries limit these legal transactions to simple sales of physical objects for a previously agreed upon price, and are thereby acting more like straightforward merchants than fully-fledged agents, if no other agreement is made then the powers of the gallery to make these kind of agreements theoretically encompasses any legal responsibility the artist is able to take on.
Traditionally representation has been a very poorly defined field of law, with almost no clear provisions made in the laws of most countries up to the 19th century and today still often only accounted for in somewhat provisional terms. This lack of definition brings forth much unclarity and possibilities for dispute.
Under Dutch law for example, it is presumed that any person who engages in a legal transaction does so on his own behalf. Yet it is also true that by the way a gallery and artist commonly present their relationship, and through some other details such as exclusivity of sales within a geographical area, it can be presumed by a third party, an interested buyer for example, that the gallery speaks wholly on the artist's behalf and that anything the gallery thus agrees with on the artist's behalf is in alignment with the artist's wishes. Because the third party had reason to believe that the transaction was made in good faith, with the artist outwardly displaying that the gallery is authorised to make legal transactions on the artist's behalf, nearly everything the third party and the gallery agree upon is therefore legally binding for the artist.
Thus if a gallerist agrees with a collector to 'sell ten works by the artist for € 300 each' then the artist in question is legally bound to deliver those works and pay the gallerist the agreed upon commission, even if the average selling price of that artist is normally higher than that.
There are of course some ifs and buts attached to this statement, such as that both the gallery and the buyer must be able to reasonably assume that this was a fair or unexceptional agreement. For example, the sale of ten paintings by Marlene Dumas for € 3000 is probably going to get annulled in a courtroom if disputed, as the normal market value of these paintings greatly exceeds the agreed upon amount and thus a buyer could have known something was amiss, yet the sale of 'ten works by Marlene Dumas' for the same price will probably be upheld, as the description is sufficiently vague that we might assume those works consists of some lithographic prints or small preliminary sketches of little note, for which € 3000 might be a low, but not unreasonable sale price.
In either case the point is that although the factional relationship between a gallery and an artist is commonly one resembling that of a merchant and a producer of goods, a gallery's decision power over an artist's business dealings is theoretically far greater than that. Because of the way galleries and artists commonly present their dealings with each other, a gallery could independently make far-reaching decisions about the way artists conduct their business, with the artist having little legal recourse to dispute those decisions by claiming the gallery was not acting on their behalf. That is, unless there is a well-defined contract that stipulates how the two parties relate to each other.
