1. How can I differentiate between the types of possible relationships with a gallery?
The simplest way to identify the type of relationship between an artist and a gallery is to identify its purpose.
If the purpose of the relationship is to sell one or more work(s) to a gallery on a one-off basis, regardless of whether the gallery subsequently re-sells the work(s), the purpose of the relationship is a sale. In this scenario, the one-off transaction should be recorded in a contract of sale or a sale and purchase agreement.
If the purpose of the relationship is to allow a gallery to hold and potentially exhibit one or more work(s) for dealing purposes (i.e. to pursue sales to third-party buyers), the work(s) can be held by the gallery in one of two manners. The work is either held on a ‘sale or return’ basis, in which case the gallery is likely to become the buyer of the work, but will only purchase the work once it has found a third-party buyer or will else return the work to the artist. Alternatively, the work is held by the gallery on a consignment basis, in which case the artist remains the owner of the work until it is sold to a third-party buyer by the gallery on behalf of the artist. The relationship should be recorded either in a sale or return agreement, or a consignment agreement.
If the purpose of the relationship is for the gallery to become a representative of the artist by promoting and selling the artist’s work, and increasing their institutional and market presence, the gallery will act as agent for the artist and the relationship will be an agency relationship recorded in an agency or representation agreement. The representation may be limited in scope to a country, region, or time period, allowing the artist to deal with other galleries simultaneously. Alternatively, the relationship may be one of exclusive representation, which will restrict the artist’s freedom to deal with other galleries. In both cases the gallery gains several prerogatives allowing it to exercise some discretionary powers in the interest of the artist which are accompanied by fiduciary duties. Generally, a representation agreement is accompanied by one or a series of consignment agreements.