What Belongs in an Art Consignment Agreement

Most consignment disputes are not about bad faith. They are about a term nobody wrote down, discovered at the worst possible moment — usually when a work is damaged, or an artist wants their piece back mid show. Here is what a workable agreement covers, and what goes wrong when it does not. 1. The commission split, stated as a percentage of what "Fifty fifty" sounds unambiguous until a piece sells at a discount. Fifty percent of the list price or of the sale price? If the gallery discounted to close the sale, is the artist sharing that discount? Say it explicitly: the gallery retains X% of the actual sale price, net of sales tax and shipping. Both halves matter. Tax was never yours to split, and shipping is money forwarded to a carrier. 2. How long, and what happens at the end A consignment without an end date is a loan nobody can close. Set a period — six or twelve months is common — and say what happens when it lapses: automatic renewal, return at whose cost, or a conversation. The cost of return is the part that gets skipped and the part that gets argued about. 3. Who insures it, and for how much While a work is in your gallery, it is your responsibility, and your policy needs to cover works you do not own. State the insured value. Artists frequently assume retail; policies frequently pay a lower figure. Agree it in advance and write the number down. 4. Where the work may be Can it go to an art fair? Into a client's home on approval? To a photographer? Each of those moves it outside your premises and possibly outside your policy. List what is permitted and what needs written consent. 5. When the artist gets paid Not "on sale" — on cleared funds , with a stated number of days. Thirty is normal. If a payment plan is involved, say whether the artist is paid in instalments alongside you or in full on completion. 6. Discount authority How far can you discount without asking? Ten percent is a common answer. Beyond that, the artist is consulted. Without this you are choosing between losing the sale and having an awkward conversation afterwards. 7. What happens if a work is damaged Who assesses it, who pays for restoration, and what happens if it cannot be restored. Point to the insured value from clause three rather than inventing a new number. 8. Records the artist can see Artists are entitled to know where their work is and what it sold for. Saying so in the agreement — and being able to produce it in a minute — prevents most of the suspicion that builds up over a long relationship. The practical part Whatever the agreement says, you need to be able to answer three questions instantly: which consigned works do I hold, whose are they, and what has each one done. A gallery that can answer those in front of an artist has a very different conversation from one that says it will check. That is a record keeping problem, not a legal one. But the agreement is what makes the records matter. This is general guidance, not legal advice — have a lawyer in your jurisdiction review your template before you use it.