Detailed Discussion

Commercial galleries generally act as agents for artists and sell artworks on consignment under an agency agreement. However three other models are also considered in this section of the Code; one-off exhibitions, multiple sales outlets and works purchased outright, as outlined below.

• Agency Agreements: In an exclusive agency agreement, the gallery can sell artwork on the artist's behalf and is generally entitled to a commission on any sales, whether or not the sale is made directly through the gallery. For example, commission may be payable when the artist sells work to exhibition visitors, social media followers or contacts via the artist’s website. In the full representation model, the gallery actively manages the artist’s career development and can be instrumental in an artist’s career success. Full gallery representation is often exclusive and/or confined to a geographical area or period. 

• One-off Exhibitions: In single or one-off exhibitions, artworks will generally be sold on consignment and the gallery acts as the artist’s agent for an agreed period. Single or one-off exhibitions may be preferred where a gallery offers the artist a one-off show with a view to offering full gallery representation, the gallery is outside the artist’s agreed territory of representation or invites an artist within the same territory to exhibit in a themed exhibition.

• Multiple Sales Outlets: Artists who do not have an exclusive agency relationship with a representing gallery may exhibit in different venues simultaneously, sometimes in the same city.

• Works Purchased Outright: A gallery may purchase artworks outright from the artist for on-sale by the gallery. In this case, there is no agency relationship and the arrangement is generally more straightforward for both parties. Although the artist retains copyright in their work, on payment the gallery takes full ownership of the work. It will usually take responsibility for matters like the retail price of the work, installation, display of work and insurance.

Some galleries also operate an online selling platform or website. For discussion of art sold directly by the artist or through a third-party website, see Selling Online.

Various legal instruments with implications for relationships between commercial galleries and artists exist.

Australian Consumer Law (ACL) prohibits businesses from engaging in false, misleading, deceptive or unconscionable conduct, and from using unfair contract terms in consumer contracts. The ACL also provides consumer guarantees in contracts for the supply of goods and services. If the gallery is informed by a buyer that a work is faulty, it is good practice for the gallery to inform the artist of the issue. If necessary, an appropriate remedy should be discussed with the artist.

The Copyright Act 1968 (Cth) is legislation that regulates copyright in Australia in relation to original literary, dramatic, musical, sound recordings, films and artistic works, see Intellectual Property.

Under the Resale Royalty Scheme artists may be entitled to a 5% royalty of the sale price of eligible artworks resold commercially for $1,000 more. Galleries must report all relevant sales over $1,000 to the Copyright Agency. For more information, see Resale Royalty.

If an artist has work on consignment with a gallery that goes into administration or closes, the Personal Properties Security Scheme (PPSS) offers the artist limited protection. The artist must register the artwork on consignment with the Personal Property Securities Register for this protection to apply.

Obligations in the areas of workplace health and safety (see Workplace Health and Safety) and accessibility (see Access Rights for d/Deaf and Disabled People) also apply.

Good practice recommendations for full representation arrangements are detailed below. Limited representation may not be as extensive. When considering representation, it is recommended that an artist and gallery carefully consider if they are the right fit for each other.

Responsibilities of Galleries in Agency Agreements

General Responsibilities

• mentor and further the career profile of the artist 

• monitor and protect the artist’s interest and legal rights including the artist’s intellectual property

• register for and monitor Resale Royalties on behalf of the artist

• report relevant resales to the Copyright Agency

• arrange promotion of the artist’s work in the manner and scope agreed by the parties 

• pursue ongoing sales, commission and exhibition opportunities outside the gallery in the public and private sector 

Sales Responsibilities

• have a process in place where payments owed to artists for works sold are separate from gallery operational costs. For example, operate a bank account that is used exclusively to receive payments for works sold

• advise the artist of usual account-keeping procedures and methods of payment 

• pay the artist promptly no later than 30 days after receipt of funds

• make the artist aware of policies regarding ‘reserved’ works and notify the artist if works are reserved from sale, for whom and for what period

• refuse credit to purchasers without the written approval of the artist 

• refuse to release a work to a purchaser before full payment has been received by the gallery, without the prior written agreement of the artist

• at the end of each quarter and the end of each financial year, account to the artist for all sales made in the previous 12 months and works held on consignment

• immediately advise the artist if a purchaser defaults on payment 

Record-Keeping Responsibilities

• keep clear records of all works in possession and/or on loan to institutions

• if requested, provide the artist with a statement of the location of artworks

• keep appropriate records of individuals, corporations or institutions who purchase artworks 

• if requested, provide the artist with purchaser details unless a purchaser has specifically requested privacy

Promotional Responsibilities

• obtain approval for any promotional activities that use the artist’s name

• obtain approval for the use of all photographic images 

• advise the artist of any upcoming promotional activities, and keep records of any promotions, coverage or publicity

• discuss and obtain the artist's approval for any social media promotion strategies, in particular, the appropriate timing for releasing images of artworks to the public

Duty of Care Responsibilities

• exercise diligence and due care when handling, storing, displaying and packing artworks 

• ensure the premises and any off-site gallery storage are secure and have suitable controls to protect artworks from potential damage caused by light, temperature, humidity, fire or flood 

• advise the artist if an artwork is damaged while in the possession of the gallery, and give them the option to repair the work or to approve a conservator 

• cover the cost of all repairs, including the artist’s labour costs where relevant

• obtain and maintain public liability insurance and any relevant insurances for loss or damage to artworks

Responsibilities of Artists in Agency Agreements

• provide original artworks to the gallery as agreed

• deliver works to or from an exhibition space on time and as agreed 

• provide a full list of consignment works including specifications and prices

• provide good quality images, specifications, artist statements and approvals for promotions

• register their security interest in the artworks with the PPSR

• refer all sales enquiries within the gallery’s agreed territory to the gallery 

• avoid competing, or being seen to compete, with the gallery either via their own website or on social media platforms

• install works for exhibitions (including providing installation equipment, supplies, plinths, additional lighting or technical equipment) 

• install works in a safe and accessible manner

• maintain public liability insurance (if not covered by the gallery's insurance policy)

• insure artworks for loss or damage while not in the gallery's possession 

• supply ABN, GST registration (if appropriate) and any other details required by the gallery to pay the artist in a timely manner

Recommended Provisions in Agency Agreements

It is recommended that any agreement made between an artist and a gallery is in writing and signed by both parties. A representation agreement can take the form of a letter or an email, provided the agreed terms are clearly outlined.

It is good practice for representation agreements to use equitable language which reflects the benefits of the relationship for both parties. NAVA encourages the use of Arts Law's Artist and Gallery Agreement template.

If the gallery produces a draft agreement, it is good practice to provide an artist with adequate time and opportunity to consider it properly and, if preferred, to obtain independent advice on its contents. On request a liaison person, and/or interpreters or other support workers may assist the artist to discuss the terms of the agreement on their behalf. 

It is recommended that the following terms are jointly determined by the artist and the gallery and outlined in the agreement.

• Artworks: The number and nature of the artworks which the artist will provide to the gallery.

• Scope of agency: The extent of the gallery's rights in the agency agreement, including the right to exhibit, sell and commission the artist's works and any further rights that the gallery may have.

• Territory and period of representation: The gallery’s geographical area of representation and whether it is global, international (restricted by country), national, state-wide or regional. If the gallery’s commission rates vary between territories. It is not good practice for a gallery to insist upon a sphere of representation that exceeds the true territory of its operations and be prepared to substantiate any claim for exclusivity beyond its city/state location.

• The period of representation: The start and finish dates for the agreement.

• Pricing of artworks: The retail price of the artist’s works, considering the artist’s length of experience, past price level, prices of comparable artists, record of exhibitions, work placed in collections, number and prestige of commissions, prizes awarded, cost of materials and market conditions.

• Presentation costs: The cost of framing or installing artworks for exhibition or post-exhibition purposes. It is recommended that all prices quoted by the gallery be inclusive of GST.

• Gallery commission: The rate of commission should reflect the length of the artist/gallery relationship, the level of the gallery’s contribution and the experience and reputation of the artist.

• Donations: Payment of commission on donations of artworks to charity auctions and fundraising events, including any long-standing donation arrangements or the setting of reserve auction prices. Galleries may request that their contribution on donated works is acknowledged.

• Gallery sales procedures and invoicing: Including the use of payment methods such as ArtsPay.

• Exhibition arrangements and costs: The frequency and nature (solo, group, online or other) of exhibitions.

• Media and promotion: Method and channels the gallery intends to use to promote the work. It is good practice to discuss media and promotion for specific exhibitions at an appropriate time before an exhibition or event. In general, photographic imagery (except the copyright) will be owned by the party who pays for it. 

• Terms of review: It is recommended that the commercial relationship is reviewed alongside the results of each exhibition.

• Termination: The terms for terminating the agreement, including responsibility for the costs of returning works, the time allowed to return works, a requirement to make payments due to the artist, and the removal of links or contact details from the respective websites of the artist and gallery. It is common practice to provide a period of 30 days for termination notice. Termination of the agreement should always be made in writing. 

• Disputes: The process for resolving disputes that may arise, including terms relating to mediation, see Grievance and Dispute Resolution.

Responsibilities of Artists

Artists are often responsible for the cost of transport to the exhibition, framing, promotion and display of work. 

Recommended Provisions for One-off Exhibition Agreements

It is good practice for the parties to work through the Agreement Checklist to determine which terms are relevant before making a written agreement.

It is good practice to agree to the commission levied on sales by the gallery up front, and for the commission to reflect the financial input and other contributions of both parties. 

Recommended Provisions for Multiple Outlet Agreements

It is good practice to agree to the terms of the arrangement in writing. Artists and galleries/outlets should also apply principles of cooperation and common sense to resolving potential problems. Parties should also work through the Agreement Checklist to determine relevant terms.

It is recommended that the following issues are jointly determined by the artist and the gallery and outlined in the agreement.

• Territory: The question of territory should be discussed with the artist’s dealer or agent to ensure there is no difference in expectations. 

• Exclusivity: If exclusivity of the product (especially in craft or design) is important to the gallery/retail outlet, an artist might consider offering exclusive products within a certain geographical area. Where it is a term of their agreement, artists should direct clients who approach them to their gallery/retail outlet. 

• Unsold work: How to handle unsold work on consignment. 

Responsibilities of Galleries

Where a gallery purchases a work outright, it has a responsibility to:

• be aware of their responsibilities under the Resale Royalties Scheme, see Resale Royalty

• be aware of the moral rights of artists under copyright law (see Intellectual Property) and Indigenous Cultural and Intellectual Property (see First Nations)

• pay the artist within 30 days (or less as negotiated)

Responsibilities of Artists

Where a gallery purchases a work outright, the artist has a responsibility to:

• establish a credit reference for the gallery to ensure it is reputable and that they will be paid for work 

• set a wholesale price and advise on a recommended retail price for the work 

• discriminate honestly between production line, limited edition and ‘one-off’ works and price or recommend on the pricing of work accordingly 

• register work with the Personal Property Securities Register; if artists have work in multiple galleries, they should register each gallery 

Recommended Provisions for Purchase Agreements

It is recommended that the following issues are jointly determined by the artist and the gallery and outlined in the agreement.

• Pricing: It is good practice to negotiate wholesale, retail, visual concept fees and trading terms between the artist and the gallery when developing the contract for the products.

• GST: If the artist is GST registered, they will charge GST on the wholesale price of the work. If the gallery or other relevant business is also GST registered, they will charge GST on the retail price of the work. 

• Insurance: Responsibility for insuring work in transit to and from the gallery should be outlined in the agreement. Once received by the gallery, insurance becomes the gallery’s responsibility. 

In some instances, a retail outlet may develop a product in collaboration with the artist, provide insight into market demands and trends and act as a partner in the development of the product. While this is not necessarily a commission in the traditional sense, the standards relating to commissioning art, craft and design can be applied to this kind of product development, see Commissioning and Funding.

For assistance with negotiating licensing arrangements for the use of artists’ work on products, contact the Copyright Agency. 

Agency Agreement Commission

Commission for full gallery representation on sales negotiated by the gallery generally varies between 40% and 50%, exclusive of GST, but may be lower or higher depending on individual circumstances. 

In addition to the contribution of both parties, matters to be considered when determining an appropriate commission (and to be included in any written agreement) are:

• cost of production of works 

• additional artist involvement that may be required in commissioned works

• different rates of commission that may be agreed – for example, commissions may be split between representing gallery and other sales outlets for works entered in awards, prizes and exhibitions, for public artworks, participation in biennales or  works donated to charity auctions or fundraising events 

Commission arrangements for limited gallery representation will vary depending on whether sales are made through a gallery (including online sales) or via an online platform or marketplace. Commission arrangements may also stipulate that a gallery with a non-exclusive right to negotiate commissions on behalf of an artist will not be entitled to a commission for artwork negotiated directly between the artist and commissioner.

Artists should always check carefully whether they are liable for the payment of any additional fees or costs above the nominated rate of commission.

Discounts and Payment by Instalments 

Transparency on pricing is important to the artist–gallery relationship and discounting by galleries is generally discouraged. 

It is good practice for the artist and gallery to discuss and agree in writing to apply any gallery policies regarding discounting or credit. This includes institutional discounts or payment terms, payment by instalments, lay-by or ‘buy now pay later’ schemes (such as Art Money). A clear, written agreement on discounting will avoid possible contraventions to the artist’s moral rights. Generally, it is good practice to avoid discounting work, but when offered, deduct the discount from the gallery's commission unless otherwise negotiated with the artist.

It is good practice to ensure a minimum deposit of 25% for works priced under $1,000, and 10% to 15% in all other cases, is paid by a client to hold a work, except where a sale is made to a public institution. The holding period should be no greater than 30 days. If the sale does not proceed, the deposit is forfeited by the client and the artist is paid the balance.

Exhibition Costs

Responsibility for costs associated with transport, installation, gallery preparation, promotion, catalogue production, framing and printing should be agreed upon in advance. Depending on the circumstances, some costs may be split between the gallery and the artist. 

In general: 

• the artist pays for transport to the gallery and the gallery covers any return freight charges

• works should be delivered in the condition that they will be displayed and purchased

• the gallery should advise the artist as early as possible when material such as artist statements, artwork images or studio photographs are required for exhibition purposes

• it is recommended that the gallery enter into a Sale of Artwork agreement with purchases of the artwork with provisions covering liability related to transporting the artwork to the purchaser

Work Purchased Outright

The artist may offer the gallery a two-tier pricing system for purchasing work outright or buying on consignment. The markup on works purchased outright may be higher than the gallery's fee under a commission arrangement. This increased return to the outlet recognises that the outlet has taken on the risk of the sale. 

The artist and the gallery should agree on variations in the amount of the markup or commission according to the scale of the order and the wholesale value of the work. 

Where other agencies or galleries have been involved in the sale of a work, the total markup or commission should remain the same. It is recommended that the total commission is split appropriately between the managing parties, so that the artist receives the full wholesale price as agreed.

It is the artist's responsibility to consider, communicate and plan for the accessibility of the work and, where possible, ensure the work is accessible. It is the gallery's responsibility to communicate, consider, plan and, where feasible, ensure accessibility of physical spaces, online spaces and events.

For more information, see Access Rights for d/Deaf and Disabled People.

It is the gallery’s responsibility to ensure that all artworks in its care, custody and control are comprehensively insured for loss or damage when at the gallery premises or in transit.

For more information, see Insurance.

It is good practice for the agreement made between the gallery and the artist to set out how any disagreements will be managed.

In situations where the artist and the gallery are unable to resolve a disagreement, a dispute can be referred to Arts Law's Alternative Dispute Resolution – Mediation service.  

For more information, see Grievances and Dispute Resolution.

For details on intellectual property, including moral rights and copyright, see Intellectual Property.

For details on Indigenous Cultural and Intellectual Property (ICIP), see First Nations.

For more information, see Taxation.