When a US artist consigns work to a gallery, the gallery doesn't own it — the work and any sale proceeds are held in trust for the artist. That's the rule in the many states that have specific artist consignment statutes. But in practice, galleries sometimes fail to hold work and proceeds separately, and consignment contracts can bury terms that leave artists exposed if the gallery closes or goes bankrupt. Before signing, check both the contract and the specific state consignment statute that applies.
What is a Gallery Consignment Terms?
An art consignment contract is an agreement under which an artist delivers artwork to a dealer or gallery for sale, with the artist retaining title until sale to a buyer. Many US states have specific artist consignment statutes that impose fiduciary duties on the dealer: the work is held in trust for the artist, sale proceeds are trust funds, and these are protected from the dealer's creditors. States with such statutes include New York (Arts and Cultural Affairs Law §§ 12.01 et seq.), California (Civil Code §§ 1738 et seq.), Illinois (815 ILCS 320), Oregon, Texas, and many others. Beyond state law, the UCC (Article 9) governs security interests in goods.
Red flags to watch for
This language can strip statutory consignment protections. A genuine consignment should be explicit — artist retains title, work is held in trust.
Typical primary-market commissions are 40–50%. Watch for 'additional discount absorbed by artist' clauses that push effective commission higher.
State consignment statutes typically require that sale proceeds be held in a separate trust account. A contract silent on this frustrates the statutory protection.
Exclusive representation should have clear performance benchmarks and an exit mechanism. Silent auto-renewal locks artists in indefinitely.
The gallery should insure consigned works at full retail value. Contracts pushing insurance to the artist (or underinsuring) expose the artist to loss.
Indemnity should cover artist-specific risks (title, authenticity) — not the gallery's operational negligence.
California previously had a resale royalty statute (struck down partially); federal law does not provide droit de suite. Contract should spell out secondary-sale rights if relevant.
Your legal rights
US artists have rights under state artist consignment statutes (e.g. New York ACAL §§ 12.01–12.03, California Civil Code §§ 1738–1738.9, Illinois 815 ILCS 320, and similar statutes in many states). Core protections: consigned works are trust property; proceeds are trust funds; consignment remains effective notwithstanding creditor claims against the dealer. Additional protection comes from the Uniform Commercial Code (UCC Article 2 on sales and Article 9 on secured transactions), the Lanham Act for authenticity representations, the Visual Artists Rights Act (17 U.S.C. § 106A) for moral rights in works of visual art, and federal and state copyright law. State Attorneys General and private action (including consumer protection acts) can enforce consignment rules.
Questions to ask before you sign
- 1Is the arrangement an explicit consignment with title retained by the artist?
- 2What state's consignment statute applies, and is the contract consistent with it?
- 3What is the commission, and how are discounts handled?
- 4How are proceeds held — in a segregated trust account, or mixed with gallery funds?
- 5What insurance is in place, who pays, and at what value?
- 6What is the term and exclusivity, and how do I terminate?
- 7Who pays for shipping, framing, photography, and promotional costs?
- 8How are secondary-sale royalties handled if applicable?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.