January 13, 2021

It Is Time for a New Artist’s Contract Supported by Blockchain Technology to Secure Artists’ Resale Royalties

Susan Schwartz

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Susan Schwartz serves in a number of capacities with the International Law Section including Co-Chair of the International Criminal Law Committee, Vice Chair (Publications) of the International Animal Law Committee and Vice Chair of the Seasoned Lawyers Interest Network.

PDF with Citations

The Artist’s Reserved Rights Transfer and Sale Agreement (the “Artist’s Contract”) was a ground-breaking document drafted in 1971 by artist and curator Seth Siegelaub and attorney Robert Projansky.  The Artist’s Contract asserted artists’ rights to control their works after the works were sold.  These rights included the right to resale royalties, to payments when their works were exhibited for a fee, to control the manner in which their works were exhibited, and to retain the copyright in their works.  Part manifesto, part vision of an art world which treated artists fairly, the Artist’s Contract was drafted after a series of public hearings by the Art Workers Coalition in New York City.

The Artist’s Contract arose from the turbulence of the late 1960s, when the Civil Rights, Women’s Rights and Antiwar movements were in full sway.  In New York, a group of artists disaffected by museum practices formed the Art Workers’ Coalition, which advocated for legal and institutional policies giving artists greater control over the terms and conditions of ownership of their work.  The Coalition drafted a series of demands which reflected the artists’ desire for a more equitable art world, in which artists were represented on museums’ boards, paid royalties when their works were exhibited, and women and artists of color were represented in museum collections.  The Art Workers’ Coalition held a series of public hearings concerning their demands which Siegelaub and Projansky attended.

This was also the time which saw the rise of conceptual art, and many conceptual artists incorporated documentation into their practices.  Such documentation frequently included instructions for the construction and installation of the artists’ works.  These “contracts” would become an integral part of the artworks. Other artists also used contractual terms to assert their rights in their works after their works were sold.  Daniel Buren adopted the practice of requiring “avertissments” (warnings) for his works in 1968.  These warnings prohibited the exhibition, photography or reproduction of Buren’s work without his consent; required that Buren be notified when his work was transferred, and required that each subsequent owner of the work acknowledge the warning.  Buren’s warnings remained in force for 50 years after his death, and required that after his death Buren’s heirs were to receive 15% of the proceeds from any transfer of his work.  Artist Edward Kienholz retained a 15% equity interest in his completed works after they were sold; this interest was enforceable by a lien.  Kienholz also sold “concept tableaus,” which were instructions for a piece of art to be constructed by the artist in the future.  These tableaus sold for more than his completed works.  Kienholz’ contract for the tableaus provided that he was to be paid construction union scale wages for installing the work, including reasonable living expenses.  Kienholz also reserved the right to determine when the work was completed, and to freely reproduce the work.

Out of this heady stew Siegelaub and Projansky drafted the Artist’s Contract. Siegelaub’s stated objective in drafting the Artist’s Contract was:  “[T]o remedy some generally acknowledged inequities in the art world, particularly artists’ lack of control of the use of their work and participation in its economics after they no longer own it.”  Some key terms of the Artist’s Contract were:  A 15% resale royalty was to be paid to the artist each time the work was sold for a profit; notice to the artist when the work was sold or transferred; subsequent owners were be bound by the contract; the artist could veto exhibitions of the work; the artist received 50% of any exhibition fees; the artist would be consulted if repairs become necessary, and the artist retained all reproduction rights in the work.

Works subject to the Artist’s Contract were tagged with a notice form which could be affixed to the work or, for conceptual works, to the work’s documentation.  This provided notice to subsequent purchasers that the artist retained rights in the work after it was sold.

It was the first term of the contract, the resale royalty provision, which proved to be the most controversial.  Many artists at that time believed that this term commodified their practices.  Other artists embraced the concept of resale royalties, which were an accepted practice in Europe, where they were referred to as “droit de suite.”  Artist Hans Haacke used the Artist’s Contract throughout his career for works sold for more than $1,000.  In 1975, Haacke’s work, “On Social Grease,” sold for $15,000.  The work was resold at Christie’s auction house in 1987.  Haacke insisted that the contract be displayed next to the work prior to the auction, and that the contract’s terms be read to bidders during the auction.  The work sold for $90,000 — three times its pre-sale estimate and the highest price paid for Haacke’s work at the time.  Haacke received $10,000 as a result of his use of the Artist’s Contract.  In contrast, artist Robert Rauschenberg’s work “Thaw” was sold to collectors Robert and Ethel Scull for $900 in 1958 - long before the Artist’s Contract was drafted.  The work was resold at Sotheby’s in 1973 for $85,000.  Raushenberg did not receive any portion of the increase in value of his work.  Had he used the Artist’s Contract, he would have received $12,615.  This aroused Rauschenberg’s ire, and became an advocate for resale royalties for artists. 

While Congress has repeatedly considered and rejected amendments to the Copyright Act to provide artists with resale royalties, Rauschenberg’s advocacy was one of the factors which led California’s legislature to enact the Resale Royalty Act of 1976.  The Act provided artists with a portion of the increased value of their works upon resale.  The Act was challenged in court and ultimately invalidated in the Ninth Circuit’s 2018 decision in Close v. Sotheby’s, 894 F. 3d 1061, 1071 (9th Cir. 2018). The Ninth Circuit noted that artists could still obtain resale royalties by way of contract, stating:  “Federal copyright law permits (by not forbidding) purely private arrangements between an artist and a first purchaser with respect to subsequent sales.”

While there has been no successful legislation providing for resale royalties over the last 50 years, during the same time secondary market sales of living artists’ works have soared.  Collectors, galleries and auction houses have reaped the benefits from these sales; artists have gained nothing.  “Emerging” artists, in the first years of their careers, have seen their works “flipped” by repeated resales, creating an overheated market for their works and locking the artists into a “style” before their practices have fully matured.  Emerging technologies have made it possible for artists to track sales of their works in the secondary market, and blockchain registries allow artists to control the title to and authentication of their artworks.  Blockchain registries are allowing artists to sell fractional interests in their artworks, or to retain resale royalty rights.  Artist’s reserved rights, whether fractional ownership shares or resale royalties, can be noticed on the artist’s website, sales platforms, blockchain registries, and through smart pages or QR codes affixed to their artworks.  These new technologies facilitate artists’ enforcing rights in their works after the works are sold.

It is time for an updated Artist’s Contract, allowing artists to define the interests and rights they claim in their works after their works are sold, and spelling out methods of notice and enforcement using new technologies.  The contract would be a highly visible part of an artist’s practice, and would to put collectors on notice of the artist’s continuing interests in their works.  On the 50th anniversary of the Artist’s Contract, the art-world inequities the contract was designed to correct may finally be corrected due to the intersection of contract law and technology.