Legalities 13: Selling Your Work as Fine Art, Part 1

Q. So far I’ve been strictly a commercial illustrator, but now I’m thinking about participating in open studios to sell my original paintings. I’m also planning to create limited editions of fine art prints of my artwork, probably as giclée prints. Some of them are illustrations that have already been published by my corporate clients, in things like their annual reports and advertising. Is there any problem with my plan to resell those works now in the fine arts market? What else should I know about the fine arts world? Are there different legal issues for fine art than for graphic art?

A. There are several things to consider when you make the transition from commercial illustration to marketing your work as fine art. First, you should make sure that you will not be in breach of your prior contracts with the clients to whom you first sold the artwork. You should know about additional legal rights and obligations that apply to sales of fine art. Finally, you will need different kinds of agreements to reflect the different kinds of relationships you will create, for example, with agents, galleries, dealers, and your direct sales customers. In this month’s column, I will address your rights and obligations, and sales of your fine art to open studios customers. I’ll talk about working with agents, galleries and dealers in a future column.

1. Do you have the right to resell your illustrations
as fine art?

Whether you can resell illustrations as fine art now depends upon what scope of rights you gave to your original client. If you assigned all copyright to the client, you cannot make new copies of the artwork, including fine arts prints, without the client’s permission. You can still sell the original painting, because the right to own the tangible painting is separate from the copyright. That’s great if your original work is a tangible piece of artwork like a painting. However, if your original work is a digital file, you probably don’t have the right to make a new print to sell. That would count as making a copy, and it is covered by the copyright that your client owns

If, instead of assigning copyright, your contract granted your client a license to use your illustration, you need to determine the scope of those usage rights. The scope of a license can be limited in several different ways: (1) to certain types of media (print, online, broadcast, clothing, etc.), (3) to certain types of usage (e.g., in annual reports but not billboard advertising); (2) for a certain time frame, and/or (3) for a certain geographic territory. The license can be very broad or very narrow, depending upon how these limitations are described. For example, if the license granted exclusive rights to reproduce the illustration in all media , that would include fine arts prints, and you will need your client’s permission to make your own fine arts prints even if that’s not what the client is doing with your work. However, if the contract recites a more narrow limitation on usage, e.g., for print advertising and promotions, you may still be able to make your own fine arts prints. Or if the license was for a limited time frame, e.g., two years, you can make and sell your own prints after the two-year term has expired.

2. Legal rights for fine arts

As a commercial artist, your rights in your artwork were mostly governed by federal copyright laws and private contracts. When you move into the world of fine arts, federal and California laws provide some extra protection. The following laws give you future rights in your works of fine art even after you sell the actual artwork to someone else.

Copyright. Copyright gives you as the artist the right to control whether and how copies are made of your artwork. For a full discussion of copyright, see Legalities 1.

Copyright ownership is separate from ownership of individual items of art, and it does not transfer with a sale of fine art.  If your purchaser wants to reproduce the painting she now owns, she will need your permission, except for some limited “fair use” purposes. For example, she can use a picture of the artwork in order to offer it for sale, or if she lends or sells your work to a gallery, museum, or auction house, those entities can include a picture in their catalog or other publications related to selling or showing the work.

However, if your purchaser makes Christmas cards from your painting, or uses it on the webpage or on the cover of a brochure for her business, she will be liable for copyright infringement unless she got your permission. Copyright can be assigned, but only in a writing signed by you which specifically says that you are transferring “all copyright.” Copyright lasts for your life plus 70 years.

Moral rights. Federal and California laws give visual artists some of the rights that are similar to the “droit moral” or “moral rights” recognized for all artists in Europe. The federal law is called the Visual Artists Rights Act, which is codified as part of the U.S. Copyright Act, 17 USC Sec. 106A. In California, it’s the California Artists Rights Act, Cal. Civil Code Sec. 987.

Under both the federal and California laws, moral rights are limited to a specific category of visual works. These are defined as: an original painting, drawing, print, sculpture or photograph (and in California, a work in glass), if it exists only as a single copy, or under the federal statute, as a limited edition of 200 or less that are signed and consecutively numbered by the artist. Creators of such works have rights of “attribution” — the right to be named as the creator of the work, or to have your name removed from altered or damaged works, and “integrity” — the rights to prevent your work from being intentionally modified, distorted or damaged, and to prevent destruction of the work. There are some exceptions, including for murals and other works that cannot be removed from structures without damage. Modifications caused by framing or restoration are exempt unless done with gross negligence.

Under federal law, moral rights last for the life of the artist. Under California law, they last for life plus 50 years. Under both statutes these rights cannot be assigned away, but they can be waived. Unfortunately, it is becoming common practice to include waiver of moral rights in contracts which commission works of fine art. 

So, for your original paintings, you and your estate will have rights of attribution and integrity for your life plus 50 years (under the California law). For your fine arts prints, if you limit your edition to 200 or less, you will have rights of attribution and integrity for your lifetime (under the federal law).

3. Legal obligations when you sell “fine art”

Business licenses and permits. It seems that most artists sell at open studios “under the radar”, without officially registering as a business or collecting sales taxes. However, the better practice is to get appropriate licenses if they are legally required. Whether you need a business license, fictitious business name registration, sales tax permits, etc. will depend upon the ordinances in your particular city or county. Occasional private sales of artwork may or may not qualify as an active business for which such filings are necessary. For example, in San Francisco nearly everyone engaged in selling anything should have a business license, which for sole proprietors can cost as little as $25 per year. A good resource for finding the specific requirements in various localities in California is the CalGold website, www.calgold.ca.gov. If you already have appropriate business licenses/permits for your illustration business, you can probably conduct your open studios sales as part of that same business.

Implied warranties. California law implies certain warranties into every sale of goods by a merchant or retailer. Open studio sales by artists could potentially qualify as such retail sales, although I’m unaware of any cases interpreting these provisions specifically in this context.  The implied warranties are called ”mechantability” and “fitness for a particular purpose”. Generally, these mean that the goods are free from defects and fit for the ordinary purposes for which such goods are usually sold. If the seller has skill and knowledge that a buyer would rely on, there is also a warranty that the goods are fit for the buyer’s particular purpose. These warranties are implied by law into every retail sale unless they are explicitly disclaimed in a written contract.

In the art world, these translate as guarantees that the artwork is authentic (e.g., if it is sold as an original work of art by a particular artist, it is not instead a reproduction, a forgery, or created by a different artist), and that, depending upon the media, it is relatively durable and will not deteriorate over time. When you sell your own artwork, presumably you are not misrepresenting its authenticity. However, you could get into trouble over the quality or longevity of your materials. In the past there have been some problems with certain concentrated water color inks and some inks used to make giclée prints. The inks faded after a few years, thus rendering the artwork worthless or much less valuable than the buyers reasonably expected. Misapplication of varnishes or use of acidic mounting materials could also result in damage to the artwork over time.

Disclosure requirements for fine art prints. California law requires art dealers to provide a “certificate of authenticity” with every fine art print or multiple that they sell (Cal. Civil Code Sec. 1740-45.9). (This law was passed in response to massive fraud in the fine arts print market, especially with respect to forged Dali prints. Several other states have similar disclosure laws.) The certificate must provide specific details about the nature and provenance (history of title) of the print. If a dealer fails to provide one, or provides an inaccurate certificate, the buyer is entitled to return the print for a full refund, or three times the purchase price if the dealer’s conduct was willful.

The certificate of authenticity must include, for example:

• Name of the artist

• If the print was personally signed by the artist, or if not, how the signature/artist’s name was affixed, and under whose authority

• Description of the medium or process for creating the print

• If the print was made pursuant to a photographic process (such as giclée)

• If the print was made from a master which produced a prior limited edition, or from a master that was itself made from a reproduction

• Year the print was made

• Whether the print is being offered as a limited edition, and if so, the authorized maximum number of: signed and numbered impressions, unsigned or unnumbered impressions, artist’s, publisher’s or other proofs; and the total size of the edition

Private artists are not required to provide an official certificate, but if you sell or consign your work to a dealer, the dealer will want all this information from you. Moreover, you could be liable for general misrepresentation or fraud if you intentionally misstate a fact about a print you sell; for example, if you mark a giclée print as one of a limited edition of 200, but in reality you end up printing and selling 300.

Accordingly, it is important to be accurate about the size of your print runs. If you have sold prints marked with a specific edition size, do not reprint and sell more than that number (unless they can be accurately described as a different edition, e.g., in a different media or size). If you intend to print and sell as many giclées as the market will bear, you should not indicate that they are part of a limited edition.  Rather, they should be called “reproductions” or just sign the prints without edition numbering.

4. Agreements for direct sales of your artwork

In my experience, most artists and their customers are unaware of the rights and obligations they each have when an artwork is sold. Many buyers, even sophisticated high-end art collectors, think they can make copies of paintings they buy, or that they can alter the works. I once had a client, for example, who wanted to cut up a lithograph into four pieces to resell as separate works. He was surprised to learn that his plan would violate the artist’s moral rights. Similarly, most artists and buyers, and even many professional art dealers, are unaware of the resale royalty or print disclosure laws. And many artists are not aware of the implied warranties that might attach to sales of their work. 

Most artists give their open studios customers a simple receipt when they buy an artwork. I strongly recommend instead that you develop a more comprehensive sales agreement. That way you can educate your purchasers about your continuing rights in the artwork, and at the same time protect yourself from potential claims that the artwork is defective. 

Here is an example of very comprehensive sales terms that address these concerns:

Terms of Sale:

• Ownership. Artist retains title to the Artwork until Artist is paid in full.

• Reproduction. Artist reserves all rights of reproduction, including without limitation all copyrights and trade dress rights, in the Artwork. Purchaser may reproduce the Artwork only upon advance written permission from Artist in each instance (except for incidental noncommercial reproductions such as personal photographs of physical settings where the Artwork is displayed). Artist’s signature and/or copyright notice as they appear on the Artwork at the time of sale shall not be removed or concealed. Artist shall receive authorship credit in connection with the Artwork or any reproductions of the Artwork.

• Maintenance. In compliance with federal and California law, Purchaser will not intentionally damage, alter, modify, or change the Artwork in any way whatsoever. If any alteration of any kind occurs after receipt by Purchaser, whether intentional or accidental and whether done by Purchaser or others, the Artwork shall no longer be represented to be the work of the Artist without the Artist’s written consent. Purchaser shall undertake reasonable efforts to ensure that the Artwork is properly maintained. Purchaser shall not destroy the Artwork or permit the Artwork to be destroyed without first offering to return ownership to Artist or her successor in interest.

• Repairs. Purchaser shall seek Artist’s prior written approval for all repairs and restorations to the Artwork which are made during the lifetime of Artist. To the extent practical, Artist shall be given the opportunity to accomplish said repairs and restorations at a reasonable fee.

• California Resale Royalty. If Purchaser sells the Artwork, Purchaser shall pay to Artist a resale royalty of five percent (5%) of the amount of such sale, as required by the California Resale Royalties Act (Cal. Civ. Code 986).

• General. The Artwork is sold as is. ARTIST EXPLICITLY DISCLAIMS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. A waiver of breach of any of the provisions of this Agreement shall not be construed as a continuing waiver of other breaches of the same or other provisions hereof. This Agreement shall be binding upon the parties hereto, their heirs, successors, assigns, and personal representatives. Its terms may be modified only by writing signed by both parties. This Agreement shall be construed and enforced under the laws of the United States and the State of California, and constitutes the entire understanding between the parties. 

You may want to include other terms of sale, for example, a provision that your purchaser will loan the work back to you for museum or gallery shows, or to allow you to photograph it. Your agreement should also recite the title of the work, dimensions, medium, purchase price, and all applicable information under the print disclosure law (above). It should have the name, address, phone and other contact information for both you and your purchaser, so you can find each other if resale royalties are due. Each of you should sign it, and each of you should keep a copy.

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You are invited to send in questions for consideration in upcoming Legalities columns. Please send your questions to legalities@owe.com.

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Legalities is a service mark of Linda Joy Kattwinkel. © 2005 Linda Joy Kattwinkel. All Rights Reserved. The information in this column is provided to help you become familiar with legal issues that may affect graphic artists. Legal advice must be tailored to the specific circumstances of each case, and nothing provided here should be used as a substitute for advice of legal counsel.

See the index of previous columns for more answers to your questions.