A Charitable Spin on Sale Agreements of Art

By Louise Carron

In June 2020, the San Francisco- and Paris-based KADIST nonprofit organization released a new model agreement, which artists and collectors may use to ensure that part of the profits received from the resale of their artwork benefit a cause or charitable organization that they support. Reminiscent of the 1971 “Artist’s Reserved Rights Transfer and Sale Agreement” drafted by artist Seth Siegelaub and lawyer Robert Projansky’s^[1] and prepared by a group of artists, lawyer, and scholars, the 2020 “Agreement of Original Transfer of Work of Art, with Resale to Benefit a Charitable Organization” (“the 2020 Model Agreement”) puts a charitable twist on typical secondary market contracts for the sale of art.

Resale Royalties in a Nutshell

In the European Union, Directive 2001/84/EC (“the Directive”) regulates resale royalties owed to artists from member states and establishes thresholds for amounts owed to living artists up to 70 years after their deaths, based on the value of their artworks.^[2] The Directive is “intended to ensure that authors of graphic and plastic works of art share in the economic success of their original works of art.”^[3] In the United States, despite various efforts by states and federal representatives and numerous organizations such as The Royalties for Artists Coalition, there is no meaningful law on resale royalties. One of the recent federal efforts was a bill introduced in 2018 before the 115th Congress under the name of the American Royalties Too (“ART”) Act, but no progress has been made since.^[4] That same year, the California Resale Royalty Act (“CRRA”) of 1977^[5] was virtually struck down as unconstitutional by the Court of Appeals for the Ninth Circuit, on the basis that it was preempted by federal law under the Copyright Act of 1976.^[6] The CRRA is now only applicable to the sales of a small number of artworks sold between January 1, 1977, and January 1, 1978.