Are Contracts The Stepping Stone to Fairer Terms for Artists?

Art & Counsel spoke with Californian artist Virginia Broersma on how artists can leverage 21st century advancements in technology – as well as the newly created FARE contract – to achieve certain rights following the resale of their works.

The romantic notion of the starving artist who only is concerned with making their work, and doesn’t worry about contracts or invoices, has placed artists in an unfortunate position that perseveres even now into 2021.

Virginia recounts completing art school with a vague notion that if her work was good enough, the rest would fall into place. Fifteen years into her professional career however, she came realize that she also left without knowledge of how to run a business, sell her work, write a budget, market her work or recognize the legal and ethical implications of a contract, much less draft one.

via The Washington Glass School

“It isn’t impossible to make a living as an artist, it is that art students are” – Virginia generalizes – “only taught how to make art”. Yet, other key skills as just as necessary for a pragmatic transition into the “real world”.

This reality has seen a surge in artists pursuing a professional career over the last decade, while the government fails to match this growth in terms of financing, patrons and opportunities for sustainable livelihoods as a working artist. Consider the inadequacy of national funding : the reported annual budget for the National Endowment for the Arts this year is $167.5M, which pales in comparison to New York’s budget on cultural affairs alone, and was even threatened with elimination during the Trump Presidency, despite a global health crisis and art market in financial turmoil.

Artists are left to rely on the protective wing of the gallery model for their best chance at income, career growth and stability. But at what cost? While the gallery acts as a support system, handling sales along with collector and institutional relationships, this is in exchange for a strict monopoly in the artist’s works and control over even simple administrative tasks on the artist’s behalf, resulting in their disempowerment.

This position artists are placed in – one of dependence and precarity – varies from relationship to relationship, but more often than not excludes the use of written agreements among parties involved in transactions. This would be strange and against professional standard in many other industries, but is widely accepted in the art world.

“The majority of artists I know do not ask for a contract when they sell, consign or exhibit their work, for reasons that centre around being seen as “difficult”” Virginia reveals. “The art world and buyers of art in particular have benefitted from this lapse in knowledge, which undermines our leverage in negotiations, and subsequent fear – of losing out on sales, relationships, or opportunities – even if unintentionally”.

In Virginia’s personal experience, a lack of written agreement has led to galleries offering discounts for her work that she did not approve and making sales without disclosing who purchased the work and for how much. Yet, this is nothing compared to artists who watch the prices of their works skyrocket and do not see any profit – all for lack of a contract which entitles the artist to such.

Cue the tried and failed argument to remedy the American visual artist: “writers, actors, musicians, composers collect royalties – why not us?”

In North America, songwriters and composers were reportedly paid $2.7 billion in 2019, while artists received nothing. Around the world, over 70 countries have mandated a resale royalty for visual artists, excluding the U.S. This right – namely, the French-coined droit de suite – originated in France in the 1920s. Yet in the U.S., it is still considered a radical idea.

Precisely because of these unresolved issues, artists have been using contracts to secure royalties from the first and subsequent sales of their work, even when they no longer own title to it. In particular, curator Seth Siegelaub’s seminal 1971 Artist’s Resale Rights and Transfer Sales Agreement (“The Artist’s Contract”) provides that artists should be compensated at the time of the re-sale or transfer of their work if it has appreciated in value, and to be able to control the public exhibition of the work following its transfer.

Fifty years later however, the U.S. continues to lag behind in protecting the economic and authorial rights of artists when selling their works, while collectors, galleries and auction houses reap the fruits of their labor in the current art market.

The U.S. congress have struggled with the idea of this resale royalty right, yo-yo’ing between its consideration – which would amend the Copyright Act – or rejection. In California, the Resale Royalty Act which at last granted artists 5% of the increased value of their works upon resale was struck down in a 2018 decision. Notably, the Ninth Circuit opined that federal copyright law permits artists to enforce resale royalties by contract.

Excerpt taken from “An Open Letter to Artists” flyer written by Seth Siegelaub, distributed by the Art Workers’
Coalition, 1969

This issue has been given new impetus following the soaring secondary market sales of living artists’ works, and the increase in “flipping” that results in exponential profits the artist will never see. The visual arts sector have yet to organize and create protections and best practices for the security of the artists who face these struggles. This leaves many artists – including myself – still feeling like they are trying to find a way up a ladder without rungs.

Until successful legislation is in place, the use of private agreements remains a feasible alternative to establish a resale royalty and other important terms to the artist. As Virginia maintains, “artists must start to demand better practices – and implement them through using contracts – to establish a more fair and professional industry”.

Enter: The FARE (Fair Artists’ Reserved Equity) Contract, a project that began during the pandemic in the spring of 2020. Two years prior, Virginia had connected with attorney Susan Schwartz who offered to teach a workshop for artists on contracts through Virginia’s business, which supports artists with their non-studio based tasks.

“Susan’s vocal advocacy opened my eyes to not only the practical reasons that written agreements should be used in professional transactions, but equally for the fundamental reason that artists should value their work enough to protect it” Virginia tells Art & Counsel. Now, their collaborative efforts have materialized in the FARE contract – an artist-centric sale and transfer agreement that is free and accessible to any (not just visual) artist.

Artist and Attorney Susan Schwartz, Co-Founder of the Artist’s Contract

As Susan writes, it is time for an updated Artist’s Contract, and, in contrast to its predecessor, the FARE contract is one variation that spells out methods of notice and enforcement using new technologies. The advent of blockchain registries, smart contracts, QR codes and websites have made it possible for artists to notify buyers of a work’s terms of sale, track sales of their works in the secondary market, control authentication of their works, sell fractional interests and retain resale royalties. These avenues also minimize the excuses a collector might pull concerning treatment of the artwork – especially in light of the transparency social media brings to an otherwise secretive art industry.

“Modern advancements reflect that the timing is right to establish better practices that can be upheld with the aid of technology and contemporary culture shifts” Virginia tells us. The more artists and art workers ask for protection of their rights as they identify them, the greater chance these requests will become normalized. The earlier artists take the initiative to educate themselves using tools and resources freely available to them, the faster such grassroots efforts can turn into widely-adopted practices.

As Virginia quips: “It is an ambitious goal, but if its success is based on the availability of artists who feel disempowered within the art world, it is a project that might actually have some legs”.

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Edit (12/08/21): this article was previously an op-ed by Virginia. The format has been changed to better suit the voice of the publication.

Words: Rinnah Anosike.