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Contracts for Consignment


#1

Hello Orchdians! During the last SNAG Conference in San Francisco, I
moderated a panel on Contracts. The SNAG website
<www.snagmetalsmith.org> has a section on Professional Guidelines.
You can download the contracts and use them for yourself. They were
developed by Marc Paisin of the California Lawyers for the Arts.

http://www.snagmetalsmith.org/infocentral/professionalguidelines.asp

Karen Christians
M E T A L W E R X
10 Walnut St.
Woburn, MA 01801
Ph: 781 937 3532
Fx: 781 937 3955
www.metalwerx.com
email: @Karen_Christians
Board Member of SNAG


#2

These contracts are only as good as the people who sign them. When I
started out I did consignment and I had a well thought out contract
which the gallery signed. All contingencies were covered. There
was a robbery and the gallery owner wouldn’t come up with the money.
I went to small claims and got a judgement, but not the money. The
next stage is a mechanics lien on the person’s property. Still no
money. All the talk of lawyers and legal matters set me off.
Lawyers, attorneys don’t want to get involved in this stuff. There’s
no money in it. Don’t do consignment! Even with friends. When money
is involved strange things happen even with friends.

People often will do consignment because they don’t have confidence
in their work. They are happy that someone will take their work even
on consignment. And why wouldn’t they; what does it cost them? If
it’s good work and they have some enthusiasm why not buy. After all
you supplied the artistry, the materials, the labor. What do they do
for their part? Since I do sell retail I also understand that on a
purely business level the work is worth nothing until someone offers
money for it. That’s why sales people are so well compensated. And
the gallery is “the sales people”.

In my case I did consignment because I was using a stone that they
had never seen before. And the work was not traditional; they didn’t
think their customers would like it. Nothing happen for a month and
then it took off. They still would not purchase since I had
consigned previously

I now and have for a long time been fortunate to be able to sell all
my work at retail shows. I don’t even do wholesale. It’s so much
more interesting. I realize that this is out of the ordinary. When I
started out I did whatever paid

I do want to say that some consigment worked for a while. There are
galley owners who are wonderful, honest people. The closest analogy
I can think of is marriage; some work, some don’t.

This is only one person’s experience I’m sure yours will vary.

K Kelly


#3
These contracts are only as good as the people who sign them. When
I started out I did consignment and I had a well thought out
contract which the gallery signed.  All contingencies were covered.
 There was a robbery and the gallery owner wouldn't come up with
the money. I went to small claims and got a judgement, but not the
money. 

My dad is a lawyer and he has been helping me develop a consignment
agreement. He suggested I add something that I had not heard of
before but sounds like a really good idea. In the loss and damage
section of the agreement, it of course says that the gallery or store
must maintain insurance against theft and other losses. Then it asks
that the artist (me) be named an “additional named insured” on the
gallery’s insurance and be provided a certificate saying so. What
this does is in the event that the store is robbed or burns down or
whatever, the artist can be reimbursed DIRECTLY from the insurance
company. This is good especially when in a crisis situation you would
have trouble recouping your funds from the gallery/store owner.

My dad said that some people are taken aback by this request because
they have not seen it before. All they have to do is call their
insurance company and request the certificate, providing the
insurance company with the amount of added inventory which they
should do anyway. I have only presented this in my agreement once so
far and they did indeed not understand it. This was a museum shop
though and they talked like they took many of their consignments by
verbal agreement. (yikes) I think I will continue to have this in my
agreement though. If they are willing to take this small extra step
to protect my work, then I will know the level of commitment they
have to working together.

Hope this is helpul- Carrie Nunes


#4

I tried so hard to blot all that out of memory, but you’ve brought
it back with these stories. It seems so easy and desireable, for a
beginner, to go that route. Maybe being ripped-off, cheated, stolen
from and thoroughly disgusted is even a good thing - Once ! It
either kills you or makes you stronger. I can now feel comfortable
knowing I paid my toll for naivete’ and ignorance and that it never
happened again. Retail and custom jobs have been wonderful for me
and I’m now grateful for every “learning experience” and can pass
that on to my students. Am definitely stronger.

Pat


#5

I think Carrie’s suggestion (her dad’s actually) of requesting that
a consignment artist be an additional insured on the gallery’s policy
is a good one. It protects everyone in the case of a disaster, such
as fire or theft. It would not, however, protect the artist whose
work was consigned in the case of a bankruptcy if the bankruptcy
court did not honor the consignment agreement and deemed the
consigned goods as assets of the gallery rather than property of the
artist. Insurance does not protect against insolvency. It also
often doesn’t protect from earthquate and, increasingly from water
loss (ie, flood) though damage to goods is sometimes different than
damage to premises. Nonetheless, a very good idea and one which might
catch on and become routine if those of us on the list who consigned
goods were to adopt it. Thank you Carrie for the suggestion. Another
thought would be to think about having your own carrier insure the
goods which have been consigned. Finally, sometimes homeowners
policies will cover such losses - it’s worth at least tendering the
loss to them to see if they will cover it. Sheridan Reed


#6
 It would not, however, protect the artist whose work was consigned
in the case of a bankruptcy if the bankruptcy court did not honor
the consignment agreement and deemed the consigned goods as assets
of the gallery rather than property of the artist.  Insurance does
not protect against insolvency. .  .   Another thought would be to
think about having your own carrier insure the goods which have
been consigned. 

This is an interesting topic – and fairly timely from my standpoint
as I am giving a lot of thought these days to various options for
selling my work more widely. This post above and its predecessor
identify two questions or issues which I have – both of which I
think may need to be answered through the eyes of the insurance
industry.

The first comes from the recent post above, and that is, what type of
insurance does one ask for to cover onesself against someone else’s
bad business practices which results in your loss of property?

The second relates to the issue of getting a certificate of
insurance to cover your goods while in the possession of the gallery.
I am, parttime, the business manager for a small non-profit early
music ensemble. The group carries insurance and the concert
location is named as an insured as a matter of course. During this
past year, the ensemble played one concert at a second location and
we asked for and received a Certificate Of Insurance covering this
facility as well. Within the next billing cycle for the insurance,
the premium paid by the organization tripled in cost. This
experience leads me to the question as to whether or not, to the
insurance industry, certificates of insurance are a basis upon which
premium rates are determined? If so – how many galleries are
likely to agree to this particular mechanism and therefore, is it a
viable course for a small artist/producer to pursue ?

Do we have any insurance experts on the forum ??

Laura Wiesler
StoneHouse Studio