ArtLex – Artists and the Law
Archive article. This English version preserves the original discussion of artists’ contracts and resale rights in its historical context.
From a strictly economic perspective, an artist—with some exceptions—might be described as an unproductive worker, since their work rarely produces a positive economic exchange. Viewed differently, so few artists achieve recognition that the sporting expression “the winner takes it all” seems justified.
Artistic activity and the decision to pursue an artistic career therefore express a motivation beyond economics—call it the artistic flame. Yet economists can prosaically regard this as a benefit to artists themselves, partly offsetting their decision to practise art despite the prospect, or certainty, of lower average income than in other sectors.
This does not mean artists do not seek success, including financial success. It also explains why many have a second job. It is a gamble in which talent is decisive, but insufficient: luck matters too, taking many fascinating and complex forms.
Understanding potential income sources and associated rights is therefore crucial for artists not yet established, whom the original discussion estimates at almost 99% of living artists.
We must first distinguish categories. For this simplified discussion, “Authors” includes writers, singers and musicians, while “Visual Artists” includes painters and sculptors, among others. The distinction illustrates different modes of consumption and corresponding protection: Authors’ remuneration depends on sales of products whose content is intangible and indefinitely reproducible, such as books or recordings, while Visual Artists generally create unique objects, such as paintings.
Our concern here is principally economic exploitation of a work—its economic rights—rather than attribution of artistic authorship.
Generally, a visual artist creates directly, without needing an organised industrial operation, whereas publishing success requires complex industrial mechanisms.
Authors’ contracts
While the right of attribution is inalienable and cannot be waived, rights of economic exploitation can be transferred.
Authors may therefore assign economic rights while retaining authorship permanently. A transferee, such as a publisher or record company, can produce copies industrially and distribute them on the market to third parties.
Many variations are possible within what is traditionally called a licensing agreement, alongside other arrangements such as contracts for services, commissions and works contracts.
A licensing agreement typically addresses:
For established Authors, rights of first refusal are common. Publishers reserve the opportunity to review new work first and acquire it. This does not mean automatic acquisition of every new work, but the first opportunity to decline an unpublished work.
Visual artists’ contracts
A first arrangement relevant to paintings and sculptures is a direct commission: the intended recipient engages the artist to create a work, such as a family portrait.
The parties negotiate the work’s economic terms directly.
There is then the ordinary sale: buying an existing painting for a price. A transaction may also address related economic rights, including publication, exhibition and reproduction.
Consignment arrangements are widely used. The artist delivers the work to a gallery, which receives exclusive selling rights for a specified period. If sold, the gallery pays the artist the agreed amount; otherwise, it returns the work.
Under the structure described here, the work becomes the gallery’s property when a third party buys it, completing two sales—artist to gallery and gallery to purchaser—triggered by that purchase.
Another structure involves the gallery selling in the artist’s name and on the artist’s behalf for a commission: the artist sells directly to the buyer through the gallery’s service. This differs from a structure in which the gallery sells in its own name, although acting for the artist. The contractual allocation of representation and obligations therefore matters.
Under an agency agreement, the gallery promotes and invests in the artist. This commonly involves territorial limits, such as Italy or Europe, with gallery remuneration linked to commissions on works sold exclusively.
A supply agreement may commit the artist to delivering a specified number of works periodically over an agreed time for a predetermined price.
Finally, agreements for temporary use leave ownership with the artist or other owner while possession is temporarily transferred by loan or hire for exhibitions or other public or private events.
Despite the many possibilities for constructing an appropriate legal relationship, most arrangements—which remain contracts—are in practice oral, concluded with a handshake and all the later difficulty of proving the actual terms.
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The artist’s resale right
This gives creators of original graphic or plastic artworks and manuscripts a percentage of the sale price when their original works are resold after the first sale.
It entered Italian copyright law on 9 April 2006 through Articles 144 onwards of Law No. 633/1941, as amended by Legislative Decree No. 118 of 13 February 2006 implementing Directive 2001/84/EC. It lets artists and heirs follow their works over time and benefit from increased value. SIAE collects the royalty whether or not the beneficiaries are members.
The right lasts for the author’s lifetime and seventy years after death and cannot be assigned or waived.
It applies to original works such as pictures, collages, paintings, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramics, glassworks, photographs and original manuscripts, provided they were created by the author or qualify as original artworks. Limited copies made by or under the author’s authority count as originals if numbered, signed or otherwise duly authorised. Anonymous and pseudonymous works are also covered.
The relevant sales:
Sales without an art-market professional are exempt. An exemption also applies where a professional is involved but the work was bought directly from the author less than three years earlier and the resale price does not exceed €10,000.
All sales below €3,000 are exempt.
The royalty is calculated as a percentage of the sale price excluding VAT, provided the €3,000 threshold is met.
The rates are:
The total royalty cannot exceed €12,500.
For example, a work sold for €100,000 excluding VAT generates a €3,500 resale royalty.
The purpose is to give visual artists a share of the price received by the owner on resale, participating in value generated through commercial circulation regardless of whether the particular sale produces an actual capital gain.
It seeks to rebalance visual artists’ economic position against creators who benefit from repeated exploitation, particularly in music, literature and film.
Its underlying premise nevertheless treats artists as legally weaker parties requiring strong protection against exploitation. This is a romantic conception, but one with striking exceptions, especially where an artist achieves substantial public success.
Critics also argue that limiting the right to transactions involving professionals may unintentionally encourage undeclared trading.
Finally, at certain market price levels, the resale right may paradoxically put downward pressure on artwork prices and reduce artists’ income rather than support their activity.
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