In part 1, we looked at some general negotiating strategies. In part 2, we will look at questions you should be asking in any contract negotiation as well as reviewing provisions that you will likely see in your contract. For this discussion, let’s again assume that you are an artist negotiating gallery representation. As I discussed in part 1, make sure you know what you want before starting the negotiation. A good way to start that process is to, simply, make a list.
Your list should consist of questions related to the responsibilities for both you and the gallery. Try to walk through the entire relationship and process from start to finish. If the gallery represents you, what do they do? Will you get a solo show, or a group show? Do I need to create new work? When do I need to complete the work and how do I deliver it? Create this list over time, not the night before your negotiation meeting. Try to have an answer for as many questions as possible. Not every item must be in the contract, but once you sign, it will be too late to add anything so make the lost as comprehensive as possible. Otherwise, you may have no recourse if problems occur between you and the gallery. There is also a psychological aspect; the gallery will take you much more seriously if you come to the table prepared, making it easier for you to negotiate changes to terms. Here are some additional questions you might consider:
- How often will my work be shown?
- Is the contract for my whole series or just certain pieces?
- How many pieces do I need?
- Who is responsible for framing or shipping the pieces?
- Will the work be shown only at the gallery or art fairs?
- Is the relationship exclusive or can I show in other galleries?
- What kind of marketing will the gallery do? Am I featured on their website?
- What happens if I sell a piece instead of the gallery?
- What will the gallery do to promote my work during times when it is not on display?
- Who will determine the look and layout of the show– the gallery, you or both of you?
- Who insures the art? (Generally, the gallery is responsible for art while it is on their premises but what if it is damaged in transit?)
- What will the selling prices be and how are they determined?
You also need to discuss the duration of the relationship. For new artists, galleries representation will typically be three months to a year. While a year of representation can be very lucrative, it can also seem excruciatingly long if you are unhappy with how things are going. What if your work isn’t selling or the gallery isn’t promoting you successfully? To limit the downside potential, consider adding an “escape clause” to the contract, which will allow you to break it if certain conditions are not met. Escape clauses should be based on measurable numbers, not abstraction. A typical escape clause might say that if no sales are generated in 6 months, then either party can break the contract.
Don’t get escape clauses confused though with Breach of Contract for Non-Performance. If there are no sales in 6 months, the gallery may not have done anything wrong; they are just not getting your work sold. And, so you may want to move to another gallery, which the escape clause allows you to do. A Breach of Contract means that terms listed in the contract were not fulfilled by one of the parties, which is a legal cause of action for which you might be able to sue.
The most important question is how much money you receive from each sale. In a gallery setting, avoid telling the gallery how much you want. That leaves the gallery free to mark it up to whatever amount they feel like and pocketing the difference. Typically, sales are split fifty-fifty, but be aware that the artist may be responsible for the production and framing costs. That may require an initial outlay before any sales. If that is a problem, you may be able to negotiate a different deal, where the gallery gets a higher percentage but lays out the initial costs.
In any contract there are standard terms which non-lawyers find difficult to understand or don’t realize are also negotiable.
In any contract there are standard terms which non-lawyers find difficult to understand or don’t realize are also negotiable. First, there is usually a section called Representation and Warranties which says that each side is has made statements that are considered to be factual, such as the artist created the works and owns the copyrights. Along with that clause, there is usually an Indemnification Clause, which states that if the artist breaches the agreement or misrepresents themselves, then any legal costs incurred by the gallery will be paid for by the artist. But make sure that this goes both way, and that the clause is not one-sided allowing the gallery to breach and not pay the artists legal fees.
Contracts will also have terms regarding the ability to assign or sell the contract to other people as well as terms for severability (breaking the contract), making amendments, and that the present contract overrides any previous agreements. These are usually similar in most contracts but also read them carefully to make they are not one-sided.
Finally, carefully read the sections on Governing law, Jurisdiction or Arbitration. These clauses will usually be written in favor of the party who wrote the contract. For example, assume you are the artist living in Miami, and the gallery is in New York City. The Law and Jurisdiction clauses may require that both parties subject themselves to the Laws of the State of New York, that any lawsuits will be conducted in New York State or Federal Courts, and that the artist waives the right to change the location. That means that a lawsuit which could be held in Miami Dade County Court of Florida, would instead be held in New York requiring the artist to retain a lawyer in New York and travel to New York at their own expense. You may want to negotiate that term so that certain instances allow lawsuits to be in Florida. Similarly, an Arbitration / Mediation Clause requiring that both sides must hire a mediator to help the parties come to an arrangement, before any lawsuit may be filed. Arbitration is a good thing and usually helps to avoid lawsuits but the clause may also specify the location, which may be unfavorable to you. You can also renegotiating those terms.
This list is far from exhaustive but hopefully provides some guidance on how to handle a negotiation but remember that you are likely dealing with businesses or attorney that are experienced negotiators so it is always best to have an attorney with you. If that is not possible, then at the very least, have an attorney review the final contract before signing.
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