ArtNet: Curator Is Asking Buyers to Sign a Special Contract 0

[ShallowDan]

Given the inconvenient truth that the vast majority of art decreases in value from the original purchase price, I would happily sign a contract promising 15% of future gains back to the artist, assuming that the dealer/artist would similarly agree to reimburse me for an equal percentage of the loss, if the work were to be later sold at auction for less than I paid.

But I have a sneaking suspicion that their pricing concerns only run in one direction.

[Rick2you2]

1 hour ago, zhamlau said:

I was being a little facetious . 

I thought so, but that fancy, shmancy contract, was carefully designed to protect the auction house, too, or at least not hurt its interests. It maintains the loyalty of each artist by supposedly acting to protect them, helps prices go up by restricting supply for 5 years, and by giving the artist a right of first refusal, create a potential further stream of products to sell (out of loyalty, at least), all while imposing no additional costs on the auction house for its good works. I would love to see the real contracts, not the summary: I bet it has other little Berne’s which help its business.

[BuraddoRun]

3 hours ago, vodou said:

Cool. Does writing easily understood l terms into a Purchase & Sale agreement, for example a holding period qualify as; should be able to what they want with what they buy?

Because, I'm telling you, that's where I'm going as a collector that may open his collection up (again) publicly to the wolves that must make offers on clearly identified NFS pieces. If I do and somebody plays either the cry me a river card or is compelled to offer 3-5x present market value...expect the clause

Does this conversation really require only (future) "buyers" or can we open that a bit and use the standard definition owner when talking property rights, which includes: all owners (both current owner and future)?

If we can agree to that, then...it doesn't matter if the owner is the artist or the second or subsequent owner after the artist...right? The owner is the owner and is due whatever property rights we agree to (ethically) and what the law allows minimally requires (legally).

Touché. The buyer becomes a seller and can then choose to make whatever clauses they want when they sell. But I already also said in my post that the gallery has that right, as well. I don't like it, but they own it at the moment, or rather represent the owners, so they can do whatever they want. And yes, I agree that present and future owners should have whatever property rights allowed another.

And if you open your gallery, I'll bring onions with me so I'll be fueled up when I'm ready to make a tearful offer. Actually I haven't seen your gallery. Is there a place in our profiles or under our avatars where we can link our CAF galleries?

 

[Rick2you2]

I think I should mention that there are common law rules of law which can void restraints on the alienation of property (like that 5 year holding period). If void, the buyer could ignore those limits.  Most often, they involve real estate, not personal property like art, so be careful about each State’s law.

A different approach would be to auction a 99% interest in the art, with the other 1% retained for 5 years (or even just sell an option to buy, redeemable after 5 years). The most a buyer could get, then is 99%, thereby interfering with any subsequent transfers in less than 5 years.

[grapeape]

On 8/15/2020 at 10:34 AM, zhamlau said:

Sounds fun, I’m all for goofy ornate contracts makes it all so dramatic and mysterious!

If I were an artists today I’d make each buyer sign my goofy ornate contract in blood. 🩸 🩸 

[vodou]

52 minutes ago, Rick2you2 said:

I think I should mention that there are common law rules of law which can void restraints on the alienation of property (like that 5 year holding period). If void, the buyer could ignore those limits.  Most often, they involve real estate, not personal property like art, so be careful about each State’s law.

The article relates to fine art; this is a comic art sub-board. While there are parallels and commonalities between fine and comic art, perhaps the differences are great enough that "what they are doing there" doesn't matter "here"?

I write differences, some of you might wonder what they are. Okay.

• Fine art of the caliber that could go straight to auction or be flipped up to auction in a short period of time is "very hot" and "in demand" already. This is a given.
• This means: you can't just walk in off the street and buy. Acquiring requires dealer vetting of purchasers and collection works will enter and intentional placement, all according to the plan the dealer has for managing the career of the artist and by extension the dealer's program, all for a supply that is already dwarfed by demand.
• Part of the vetting/placement process already includes a no flip/time-frame/dealer buyback handshake understanding if not an actual  private written legal contract. If nothing else, "flipping" in violation of that understanding will result in being cut off in the future, not just from that artist but from the gallery's entire stable and possibley -word of mouth- from other dealers of a sympathetic nature. The collectors and dealers playing at this level already well understand this. It's not a new concept.
• Finally, fine art auctioneers have traditionally only accepted consignments of vintage (decades and centuries old) works, nothing even close to "paint still wet" items. Greed (or perhaps just a commitment to shareholder value?) changes things, so this has changed too but it's a relatively recent phenomenon. The fine art market is still feeling out how this works and how everybody "feels" about it. That's why I linked the Damien Hirst article, those two auctions were/are definitely part of the "feeling out" process.

 I think little of the above applies to comic art, except maybe the aspect of Felix's operation where he has stated publicly that he's no fan of flippers and those that would could expect something to happen in return. I don't have quotes available on this, just running from memory of posts here there wherever, and it's been a while...he could have changed his position since...so don't hold me to this, just putting it out there...as I don't remember any other rep stating anything on the subject.

[grapeape]

2 hours ago, ShallowDan said:

Given the inconvenient truth that the vast majority of art decreases in value from the original purchase price, I would happily sign a contract promising 15% of future gains back to the artist, assuming that the dealer/artist would similarly agree to reimburse me for an equal percentage of the loss, if the work were to be later sold at auction for less than I paid.

But I have a sneaking suspicion that their pricing concerns only run in one direction.

The depreciation clause! Clever!!

[Mighty Hal]

I don't follow the BWS market -- I'm not a collector of his work and I'm only occasionally a fan -- so I don't know. Did his art contracts go away? Have the buyers who signed those contracts been freed of their obligation to give Barry a percentage of any future profits on the work they purchased?

[delekkerste]

15 hours ago, Hal Turner said:

I don't follow the BWS market -- I'm not a collector of his work and I'm only occasionally a fan -- so I don't know. Did his art contracts go away? Have the buyers who signed those contracts been freed of their obligation to give Barry a percentage of any future profits on the work they purchased?

There was a large cache of his prime vintage artwork that went up for auction at Profiles in History in July 2016. I think a lot of people had misgivings about buying the art with the TAR (Transfer Agreement & Record) attached to it and BWS ended up releasing that art from the TAR at that point.  I'm not sure if it was for just the art in that sale, or, whether it covered all of his art that was sold with the TAR; I'm also not sure what the status is of any art that was sold after that date.  I'm assuming that it all went away - ultimately, it's extremely difficult to enforce and turns buyers off - but, maybe someone else here knows for sure.