By Maria T. Cannon
Maria T. Cannon is a junior associate at Amineddoleh & Associates, LLC, in Manhattan, an art and cultural heritage law firm, practicing entertainment, media, art, data protection and privacy law. in Manhattan. Maria earned her J.D. from the University of North Carolina Law School and completed her undergraduate degree at Wake Forest University in English Literature. She is admitted to the New York State Bar.
Sick of Sag Harbor? Head upstate for a change.
Upstate Art Weekend is in full swing. This year, it runs from Thursday, July 18th – Sunday, July 21th. In addition to the beloved art fair’s traditional events and temporary galleries, this year marks the inaugural edition of its experimental Zero Art Fair (which launches today).
Zero Art Fair is a zero-profit experiment after which visitors may take home free art. That’s right – high quality works, produced by top-tier artists – given away for free.
Did Someone Say “Free Art”??
Of course, we all know from high school economics that there is no such thing as a free lunch. All that glitters is not gold, and, in this case, where there’s free art, there’s a catch.
The catch here is that any visitor who wants to take home a work for free (the limit is one work/person per day) must sign a contract created by Zero Art Fair.
This contract is available online here, for anyone who wants to read it in full. Below, I’ll hit some of the highlights.
Balancing Party Interests
The entire concept is an interesting experiment, made more intriguing by a contract that diverges from the traditional gallerist’s contract of sale.
The contract for Zero Art Fair aims to balance the interests of both the visitor taking home the work (named, charmingly, “Friend” in the contract) and the artist (named, aptly, “Artist”). In my opinion, this agreement does a pretty good job at parsing out the rights at issue fairly, given the unusual circumstances. Even so, “Friends” who sign the contract without really reading it may be in for a few surprises. Artists who skimmed the contract before becoming part of the fair, however, may be better off – the contract (though fair to both parties) is arguably more favorable to the artist.
Ownership rights
One of the biggest tenants of the agreement – which is so important that it is surely explained in-person to the Friend taking home the work – is that ownership of the work does not vest until the close of a 5-year period.
During that 5-year period, Artist maintains the right to sell the work to another buyer. If that sale is imminent, Artist must offer the work to Friend at the same price (Friend has the right of first refusal here).
Friend may elect to instead buy the work outright during this 5-year period at a 20% discount from the retail price. This would prevent Artist from selling the work right off Friend’s living room wall, but, if Friend can hold out for the full term, full title will vest. In that event, Friend will take ownership at the duration of the 5-year period.
Friend Duties
Notably, while Artist has the right to sell the work during the 5-year period, Friend does not. Friend may only entrust the work to a trustee defined by the contract as a “successor-in-interest” – an individual who takes on the obligations of the contract previously undertaken by Friend. This includes the obligation to care for the work and provide maintenance necessary to its preservation.
The duty would certainly cover Friend’s storage and display of the work. Friend would need to ensure that the work is kept in a stable, temperature-controlled environment away from hard sunlight. In practice, this would be similar to how a museum cares for a work – the difference being that museums know how to handle artwork. Do Friends strolling through the Zero Art Fair understand the responsibility of caring for art long-term? Hopefully, but, as this is not in the contract, it might not be common knowledge among first-time art patrons. For the art’s sake, it would be beneficial for the Zero Art Fair team to explained this duty to Friends at the time of signing.
“Casualty Share”
Friend is also required by contract to make a good faith effort to insure the work against possible damage or loss. In the event of loss or damage (that is not the result of Friend’s tortious conduct), Friend will not be personally held liable for the work. However, if Friend receives an insurance payout, or if the damage is due to Friend’s gross negligence or willful conduct, Friend will be liable to Artist for 50% of the work’s retail price (defined in the contract as the “Casualty Share”).
Whether Friend’s duty to protect the work against loss, damage, or tortious conduct continues once Friend receives full title to the work is unclear. It would be interesting to see a case in a decade, in which an artist claims a payout after an owner of their work (who acquired it under this contract at the Zero Art Fair) willfully damaged the piece. Likely, such a claim would not have legs, but it poses an interesting theory (primarily because the provisions in this contract last 70 years after the death of the Artist, so the artist or artist’s estate may have standing).
Sale, Royalties, and Moral Rights
Such a case would align with the long-game artist rights of this contract. Just look at how the contract covers future sales by Friend: After the initial sale, Friend must promptly notify Artist, who receives a 50% cut of the profits. Any subsequent sale gives Artist 10% royalties. Not too bad for a free art fair.
Moreover, any sale that is in violation of this contact is deemed null and void. In that case, Friend remains personally liable for all the royalties due under the contract. This is one provision that may come as a surprise to Friends who don’t read the fine print so closely. Such a clause heavily favors the artist, but, considering how hard artists work (and, often, with such limited resources) who says that’s a bad thing?
What I really applaud about this contract is its attention to moral rights of the artist. The contract adopts the moral rights as prescribed by French law (namely, Code de la propriété intellectuelle, Article L121-1 à L121-4, as amended) This is huge, because moral rights under U.S. law die with the artist.
Under French law, the moral right of the artist is perpetual, inalienable, and imprescribable. Not only that, it may be transmitted to the artist’s heirs or another as dictated under the provisions of the artist’s will.
Exhibitions
Under the contract, Artist is allowed to borrow the work for public exhibition at any time during the (rolling) 5-year period, for a duration of up to 2 years. If Artist wishes to participate in such an exhibition, Artist must give notice to Friend as provided by contract (also, a kind thing to do before borrowing something) and is responsible for packing/shipping costs (also kind). If Friend wants to publicly exhibit the work, Friend may do so at their leisure – no notice to Artist required.
Termination
The contract expires 70 years after Artist’s death, unless terminated earlier by one or both parties. Friend may get out of dodge and terminate the agreement with 30 days notice to Artist. In contrast, Artist may terminate immediately at any time, if Friend has breached the contract and fails to cure the breach within 10 days. In case of Friend’s breach, Friend forfeits any right to the work and must return it promptly to Artist at Friend’s expense. Again, this might be a surprise to Friends who get caught up in the atmosphere of the art fair, and (in turn) skim the fine print.
If either Artist or Friend dies, the contract remains effective between the survivor and the deceased’s estate or successor-in-interest (as defined by the contract).
Choice of Law
The contract is governed by New York State law and all disputes must be settled in Kings County, New York. This might be a surprise to Friends from out of town, who typically associate the area with gorgeous hiking trails and spas. Interestingly, if Artist prevails in a claim against Friend, Artist may recover attorney’s fees and costs from Friend. Friend, however, is not awarded the same option against Artist.
Community Benefit
It’s an innovative and equity-based experiment: bringing choice art to the masses, and the idea of a Friend furthering the experiment’s goals by temporarily exhibiting the work in an educational space, such as a community center (as allowed per the contract) would serve the community at an unprecedented low cost of zero dollars.
Which is a lot less than the lobster salad selling for $120/lb at Red Horse Market in East Hampton.
Another reason to head upstate this weekend!
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