Understanding the Georgia Consignment of Art Act

Understanding the Georgia Consignment of Art Act

 Struggling artists are not always in the best position to protect their rights.  It is not uncommon for art galleries or art dealers to use their leverage to delay or deny payment, deny liability for damage, or in extreme cases, even flee with the artwork.  To prevent potential exploitation of an artist by a gallery or dealer, the Georgia State Legislature enacted the Georgia Consignment of Art Act, O.C.G.A. § 10-1-520 et. seq. (the “GCAA”) in 1995, which establishes certain rights for artists in Georgia when consigning works to a dealer.

What is Consignment?

According to the GCAA, when an artist gives a work to a gallery or art dealer in Georgia, it is a  “consignment” for the purposes of the Act if the following conditions are met:

    1. Delivery of an artist’s own work to an art dealer
    2. For the purpose of exhibition or sale (or both)
    3. On a commission, fee, or other basis of compensation
    4. Acceptance of the work by the art dealer

O.C.G.A. § 10-1-523.

If those conditions are all met, it is the responsibility of the art dealer or gallery to obtain a written contract at the time of acceptance or prior to acceptance establishing:

    1. The value of the work of art
    2. The time within which the proceeds of the sale are to be paid to the artist if the work is sold; &
    3. The minimum price for the sale of the work of art.

O.C.G.A. § 10-1-523.

What if the Gallery or Dealer Does Not Offer a Contract?

Georgia requires galleries and dealers to get a written contract with artists at the time of or prior to delivery of a consigned piece of art.  Failure to get a written contract spelling out the above terms permits a court to void any artist obligation at the request of that artist.

Underlying Rule in Consignment

A consignment does not mean the artist is transferring title or right to possession of the work to the gallery or dealer (consignee).  O.C.G.A. § 10-1-521.  The art dealer’s role is limited to being the artist’s agent, and the artwork is held in trust by the art dealer. O.C.G.A. § 10-1-524.  Therefore, while the gallery or dealer does not actually own the work, it does have the right to transfer title to a third party on behalf of the artist.

The Artist’s Right (as a consignor)

Until the artwork is properly sold to a third party, and the consignor is paid in full, the consignor retains full ownership of the work.  Importantly, the artist retains copyright in the work at all times. The dealer may only display the work with the prior written consent of the artist and must give the artist credit.  O.C.G.A. 10-1-527.  However, once sold, a buyer has an implied license to display the work in the usual manner.

The Dealer’s Duty (as a consignee)

Once an art dealer consigns artwork, that dealer owes a fiduciary duty to the artist, which means a duty to work toward the artist’s best interests.  O.C.G.A. § 10-1-524.  The consignee is responsible for any loss or damage to the work of art while it is within his/her control.  Id.  A dealer may not use consigned artwork as collateral or apply a lien to the artwork.  O.C.G.A. § 10-1-525.

Violation of the Act

As explained above, if a dealer fails to get the consignment agreement in writing before acceptance of the art, the artist may void the entire agreement.  Additionally, any art dealer who violates any provision of the GCAA is liable to the artist in an amount equal to: (1) Fifty dollars; and (2) Any actual damages, if any, and (3) reasonable attorney’s fees.  O.C.G.A. § 10-1-529.

 

This explanation is for informational purposes only and is not meant to address any specific situation.  If you are a Georgia artist with a pending legal issue, please contact

Georgia Lawyers for the Arts at (404) 873-3911 or gla@glarts.org.