Wednesday 19 July 2023

A Change is Gonna Come

A few months ago I read the news that the Dutch Mondriaan Fund was working on a Fair Practice Code for galleries. Starting July this year, any commercial gallery that wishes to apply for funding at the Mondriaan Fund has to implement this code in order to be eligible. The code was made in consideration with the Dutch National Gallery Association and one of the stipulations in the code is that a gallery has to have written contracts with their artists.
As writing a contract can be difficult, the Mondriaan Fund further states on their information page that various model contracts can be found on website of the NGA.

A few months ago I looked on that website and I found only one model contract. This was an 'Artist-Gallery Consignment Agreement' that was about as useful as a piece of toilet paper. I was thus preparing this post as a step-by-step consideration as to why it was a document that nobody should ever use, when I checked the NGA's website again today and found the agreement wasn't there anymore.
So then I checked the most recent backup of their website on, which dates from December 2021. On this archived page there is no mention of any model contract. I can thus only surmise that somewhere in 2022 somebody at the NGA hastily wrote and uploaded a 'model contract' to their website to appease the Mondriaan Fund in their preparation for the upcoming regulation change. Now that this change has been implemented it seems like there are other people who were critical of the proposed model agreement and I can only assume that the previous agreement was therefore taken down to be rewritten.

If that's the case I'm curious to see the results and I am hopeful that I can finally give some praise at one of these attempts of the art world to get its act together from a legal point of view.

Update 5-9-2023:
It has indeed been the case that a new model agreement was uploaded to the website of the NGA. This time it was called a 'Cooperation Agreement'. It's a workable document, broadly speaking, that mainly codifies the current common practices in the artist-gallery relationship.
It nevertheless fails to (re)consider particular points in these common practices that are or may be problematic. For example, there are some assumptions about what it means to be a 'primary gallery', which as it stands is about as legally useful as saying you'll be 'best friends forever'. A definition of this term with a legal basis would thus have been welcome.
For the rest the agreement has some inconsistencies, and inconsistencies can lead to legal disputes. Under article 2, for example, the duties of the gallery are outlined in what is roughly in accordance with a principal-agent agreement, like would be the case in an independent insurance agent and a insurance firm. Article 3 then goes into detail into how 'Unless agreed otherwise, the Artist’s work which is provided to the Gallery will always be on consignment in the Gallery'. Which is an odd thing to specify in relation to article 2, because an agent doesn't really have anything under consignment. A consignment agreement is always about specific works, while agent - principal agreements generally pertain to all activities of the agent relating to the principal in a certain geographical area. Which works 'are provided to the gallery' is thus more a question of physical storage and possession, not a different legal structure that wouldn't be covered by the agent-principal relationship.
Under article 5.1 it is also stated that 'The sales price will be the same for sales inside or outside the Gallery', which is fine enough. However, it is then stated in article 5.3 that 'The Gallery may allow any discount of up to 15% without the Artist’s permission.'. Which is something I would be interested in to see how it would play out in court, especially with the use of the words 'discount' and 'permission', as well as it being 'shared equally between the Gallery and the Artist'. That in this agreement the gallery, who as the agent is legally speaking working for the artist, unilaterally decides who can and can't deviate from the agreed upon sales prices is odd to me. For the same reason it is iffy that the gallery doesn't need to provide client information to the artist under article 6. As the gallery is a representative for the principal, legally the artist is providing the gallery with said client information, not the other way around.

All in all this new document reflects current practices fairly accurately and is therefore better than the absolute garbage they had before. Yet it still fails to comprehensively reflect on the legal nature of the relationship between the artist and the gallery , the different kind of risks artists and galleries bear, and the difference in the power relationship between the parties, which may shift over time or per subject.