Detailed Discussion

Publicly funded galleries in Australia include major national and state arts institutions (such as the National Gallery of Australia, or the Art Gallery of South Australia), council art galleries in the regions (such as Toowoomba Regional Art Gallery or Wollongong Art Gallery), and in the cities (such as Woollahra Gallery at Redleaf or Manningham Art Gallery). A wider range of contemporary art organisations, Artist Run Initiatives (ARIs), First Nations Art Centres and craft and design centres are partially publicly funded – such as Adelaide Contemporary Experimental, 4A Centre for Contemporary Asian Art, or Perth Institute of Contemporary Arts: PICA; Outerspace and Blindspot; JamFactory, Artisan, or Design Tasmania – and sell works as outlined here.

When an artist is represented by a commercial gallery and selling work through a publicly funded gallery, the artist must notify the publicly funded gallery of any contractual obligation for the commission on sales to be split equally between the public and the commercial gallery.

Publicly funded galleries may sell work for artists on exhibition in the gallery or in an on-site or online gallery retail setting. For more information, see Selling Online.

Additionally, galleries may licence an image or copy of an artist's work and use this to produce merchandise or products for sale through their retail outlets. This section of the Code does not deal with licensing processes or editioned works, but links are provided to Arts Law and Copyright Agency resources on this topic. 

Wholesale Sales and Consignments 

An artist's work may be sold under a wholesale or consignment (sometimes referred to as ‘by commission’) arrangement. 

• Wholesale: A work is directly purchased at a wholesale price for resale. Wholesale sales are simpler than consignment arrangements. They require a written contract and an understanding of standard terms of payment.

• Consignment: A gallery shows a work and markets it for sale, and then pays the artist an agreed sale fee only after the work is sold. It is recommended that any consignment arrangement has a written agreement in place.

Key Issues

Artwork sale agreements, including both wholesale and consignment, can be inconsistent for artists selling artwork through a gallery. There is a lack of transparency around pricing and purchase processes in the industry, and a lack of clarity around responsibility for transport, insurance and delivery of works.

It is good practice to give careful consideration to selling art by First Nations artists, or art that includes or refers to Indigenous objects, knowledge or works. 

Galleries and artists must ensure that Indigenous Cultural and Intellectual Property (ICIP) principles are upheld for any use or adaptation of Indigenous cultural heritage. Such considerations include how the First Nations artist and their community are promoted and acknowledged, whether the artist is represented by an Art Centre, and any cultural mourning protocols in the event of the artist's death.

It is recommended that sellers of work by First Nations artists are members of the Indigenous Art Code and uphold its principles to ensure ethical practices and fair treatment of individuals.

Arts Law provides a range of resources specifically for First Nations Art Centres and First Nations artists selling their work on the Artists in the Black site. 

For more information on engaging and collaborating with First Nations communities and Art Centres, see First Nations and Working with First Nations Art Centres.

Legal obligations apply in the areas of Australian Consumer Law, such as product safety regulations and fair trading. Guidance is available from the Australian Consumer and Competition Commission (ACCC). 

Consideration should also be given to copyright and intellectual property law (see Intellectual Property), and to tax law (see Taxation).  

The Personal Property Securities Act (PPSA) is designed to protect artists from losing their work left on consignment if a gallery becomes insolvent. For more information, see NAVA's PPSA Guide.  

Under the Resale Royalty Scheme, visual artists are entitled to 5% of the sale price of eligible artworks resold commercially for $1,000 or more. For more information, see Resale Royalty and NAVA's Resale Royalty Guide.

It is good practice for publicly funded galleries selling work to provide transparent and accessible information on their agreements and contracts.

In all sales arrangements, galleries have a responsibility to:

• meet legal obligations relating to copyright and moral rights (see Intellectual Property) and ICIP rights, including appropriate attributions (see First Nations)

• meet legal obligations in the areas of taxation (see Taxation), insurance (see Insurance) and workplace health and safety, see Workplace Health and Safety

• provide accessible (see Access Rights for d/Deaf and Disabled People) and inclusive (see Racial Equity and Representation) environments for physical and online sales

• cover insurance for the works upon delivery

• avoid discounts, but where offered deduct them from the gallery's commission unless otherwise negotiated with the artist

Wholesale 

In a wholesale process, a publicly funded gallery has a responsibility to:

• put in place a contract of sale

• negotiate with the artist on the wholesale price, recommend a retail price, confirm inclusion of GST and agree on the markup for sale, ahead of finalising contract of sale 

• provide prompt payment to the artist upon the wholesale transaction, within 30 days or less as negotiated

• take full responsibility for the sales process after the wholesale transaction is complete

Consignment 

In consignment processes, a publicly funded gallery has a responsibility to:

• cover all costs for the exhibition of works

• use a sale of artwork agreement, as provided to the artist in the agreement

• clearly document all sales of works in accordance with agreement terms 

• provide the purchaser's details to the artist, where the purchaser gives consent

• insure the work for loss or damage during the entire sale period, including transportation to the buyer

• provide prompt payment to the artist upon the sale of work

• cease showing and selling the works, and return any remaining works to the artist, once the agreed sale period ends

In all sales arrangements, artists should:

• ensure a written agreement is in place

• meet legal obligations in the areas of taxation (see Taxation), insurance (see Insurance) and copyright (see Intellectual Property) 

• if they have commercial representation, negotiate sales arrangements with their representing gallery or agent prior to offering a work for sale to a public gallery

• cover transportation to the gallery and insurance during transportation

• consider registering their works on the Personal Properties Securities Register

• consider registering their works on the Resale Royalty Scheme, see Resale Royalty

• provide clear and accurate artwork information including attribution information

It is good practice for all agreements to outline:

• terms and conditions, according to a standard, transparent and accessible (preferably digital) template

• recommended retail price (RRP) and sales terms for the work, including GST arrangements, as negotiated between the gallery and the artist

• display arrangements

• artist access

• responsibility for insurance before and after transfer to the gallery

• process for the work’s transportation

• Resale Royalty implications for the artist

Wholesale Contracts of Sale

Where works are sold through a wholesale process to a gallery it is good practice for the contract of sale to outline:

• negotiated wholesale price and terms

• gallery markup

• any conditions of resale

• provisions relating to the copyright of the artwork, including moral rights of the artist

Consignment Agreements

Where works are sold on consignment, it is good practice for the written agreement to:

• be signed before any sales are made

• describe the works being offered for sale clearly and accurately 

• clearly state the gallery is acting as the artist’s agent in the sale process only for the works offered and agreed for sale

• outline agreed dates for the sale period, the delivery process and a process for extending the period of sale 

• confirm the percentage of sale price to be received by the artist

• confirm the consignment fee received by the gallery

• include a specified payment term – either on a regular basis or on a per-sale basis within a set period

• include a template for a sale of artwork agreement, to be used in all transactions

• confirm the artist is the title owner of the work until purchase price has been paid in full

• outline the process for the return of unsold works, and any applicable shipping, handling or storage fees

• provide a process for termination and for resolving disputes

A best practice Consignment for Sale sample agreement can be sourced through Arts Law.

It is the responsibility of the gallery or exhibition space to ensure their application processes, website, social media, communications and building are accessible, and to clearly communicate about the accessibility of their venue. Generally, 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.

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

Publicly funded galleries have a responsibility to follow good practice in encouraging artists from under-represented backgrounds to participate in their programming.

For more information, see Racial Equity and Representation and Equitable Application Processes.

Wholesale

It is good practice to negotiate pricing when drafting the contract of sale. It is recommended that the artist sets a wholesale price, recommends a RRP and agrees to the gallery's markup for sale. The contract should confirm the inclusion of GST.

Consignment Rates

Publicly funded galleries can set their own rates for consigning a work for sale (also referred to as ‘commission’ fees) which can vary from 10% to 40% of the sale price and could be higher. Higher rates may also apply in retail settings within public galleries. This rate may vary depending on a range of factors, including any representation the public gallery may have provided over the artist's career and the level of service they are providing. It is good practice to agree on any rate clearly and in writing.

One of the most important considerations for artists when selling work through a gallery is taxation, particularly the goods and services tax (GST), and registration with an Australian Business Number (ABN). 

For artists who are not registered with either an ABN or for GST, any agreement for the sale of work through a gallery or other retail outlet – whether on a wholesale or consignment basis – requires careful consideration. Where the artist is GST registered, GST must be charged on the sale price of the work irrespective of the gallery’s GST status. Conversely, if the artist is not GST registered, GST cannot be charged on the sale of the work, even if the gallery is GST registered. GST will still be charged to the artist on the commission fee if the gallery is GST registered. Artists should confirm with galleries whether the agreed commission fee is inclusive or exclusive of GST.

It is recommended that artists obtain professional advice on taxation obligations, and understand how a gallery will act as their agent in any consignment process. 

For more information, see Taxation. 

It is good practice for artists to have insurance in place (see Insurance) to cover their work’s transport. Galleries are responsible for insurance after delivery.

Artists should ensure their works for sale are compliant with Intellectual Property law and do not infringe any existing copyright, trade marks or ICIP rights (see First Nations). Artists should also be aware and informed on how their copyright is protected in their written agreements with galleries. If images of works are used to advertise their sale through a publicly funded gallery, no licensing fee is paid to the artist by the organisation. 

For more information, see Intellectual Property.  

Publicly funded galleries must consider how they will follow ICIP principles when they are working with First Nations artists and First Nations Art Centres. For more information, see First Nations and Working with First Nations Art Centres.

Where a dispute arises, a number of avenues exist for resolution. These include Arts Law mediation, fair trading bodies and the Small Claims Tribunal. Arts Law provides a simple Debt Recovery Letter of Demand.

For more information, see Grievances and Dispute Resolution.