Updated: Jul 18, 2020
When COVID19 Puts a Pause on Live Gallery Exhibitions
For an artist, it is exciting news to learn that your artwork has been selected as part of a gallery exhibition. However, COVID19 has forced galleries to close their doors. So the eagerly anticipated exhibition, you, as an artist, wait for is not possible within the four walls of the gallery. Many galleries are offering virtual exhibitions and artists talks via video conferencing. While a good substitute given the limitations posed by COVID19, your artwork is still not in front of collectors and/or potential buyers in real time. You are not getting what you bargained for when you signed an exhibition agreement, paid gallery fees, and you still have to insure artwork and pay handling costs to deliver it to the gallery. What are your options?
A Way Out of the Contract
Look for a clause in the contract that addresses what both parties responsibilities are when unforeseen events occur. This clause is often known as the “force majeure” clause. Force majeure clauses speak to what happens when there is a natural disaster - flood, fire, violent storm, or other act of God. Typically, pandemics are not included in this list. However, a pandemic is still an event both parties, the gallery and the artist, could not have envisioned at the time they signed a contract for an exhibition.
Talk to the Gallery About Your Concerns
Ask the gallery if you can submit images to them for virtual display rather than shipping the art to the gallery. Offer to send a video of that tells the story of making the art and/or give a tour of your studio. This way you save shipping, handling, and insurance fees while you get a more personalized representation to the gallery for collectors and potential buyers to see.
Remember the Gallery Is Your Agent
When you enter into an agreement with a gallery, you automatically have a consignee/consignor relationship with the gallery. According to the New York Arts and Cultural Affairs Law (NYACAL) § 12.01, the gallery becomes your agent and has a duty to represent you in a light that maximizes the potential for sales for you. Trust that the gallery, much like you, is faced with challenges to operate. You both have a mutual interest in earning money. For a detailed example see this case.
Postpone the Exhibition Date
When you speak with the gallery, talk about the possibility of postponing the exhibition date to a time when the mandatory closures and social distancing restrictions are no longer in place. The gallery may tell you that they can still represent you in the best light and that they want to move forward with a “virtual exhibition.” This is the time to use a contractual doctrine known as “frustration of purpose” to defend you position. The primary purpose of the agreement was to have an exhibition in real time, not a virtual exhibition. Due to the COVID19 legal restrictions on in person gatherings, it is impossible to have an exhibition within the gallery space.
Interruption of Business Insurance To Cover the Your Losses and The Gallery’s Losses
Interruption of business insurance applies to situations when a business is forced to shut down because of some type of damage. Typically there must be physical damage to the business location for this insurance to apply. However, there are proposed bills in several states (New York being one of them) to force insurance companies to cover businesses affected by COVID19. If the bill passes, insurance companies would be required to provide coverage retroactively. For more details, visit the National Law Review website and read New York Assembly Bill A01226.
After COVID19, I think a lot of force majeure clauses in contracts will include pandemics or diseases within the list of events that are considered an unforeseen act of God. When you look at a contract from now on, see if it includes pandemics and diseases and if it does not, add them into the list of triggering events that excuses you from the contract.
Developments Since April 2020
State Judge Reject's Michigan Restaurants COVID19 Business Interruption Claim https://www.insurancejournal.com/news/national/2020/07/07/574497.htm
Proposed Legislation in California, Rhode Island, and Louisiana
This information is provided for general informational purposes only. No information contained in this article should be construed as legal advice and does not establish an attorney-client relationship.
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