Rhode Island General Laws 5-62-7. Artists – Art merchant relationships
(a) Notwithstanding any custom, practice, or usage of the trade, any provision of the Uniform Commercial Code, or any other law, statute, requirement, or rule, or any agreement, note, memorandum, or writing to the contrary:
(1) Whenever an artist or craftsperson, his or her heirs, or personal representatives, delivers, or causes to be delivered, a work of fine art, craft, or a print of his or her own creation to an art merchant for the purpose of exhibition and/or sale on a commission, fee, or other basis of compensation, the delivery to and acceptance of the work or print by the art merchant establishes a cosignor/cosignee relationship as between the artist or craftsperson and the art merchant with respect to the work, and:
(i) The cosignee shall thereafter be deemed to be the agent of the cosignor with respect to the work;
(ii) The work is trust property in the hands of the cosignee for the benefit of the cosignor;
(iii) Any proceeds from the sale of the work are trust funds in the hands of the cosignee for the benefit of the cosignor;
(iv) The work shall remain trust property notwithstanding its purchase by the cosignee for his or her own account until the price is paid in full to the cosignor; provided that, if the work is resold to a bona fide third party before the cosignor has been paid in full, the resale proceeds are trust funds in the hands of the cosignee for the benefit of the cosignor to the extent necessary to pay any balance still due to the cosignor and the trusteeship shall continue until the fiduciary obligation of the cosignee with respect to the transaction is discharged in full; and
(v) No trust property or trust funds shall be subject or subordinate to any claims, liens, or security interest of any kind or nature whatsoever.
(2) Waiver of any provision of this section is absolutely void except that a cosignor may lawfully waive the provisions of subsection (a)(1)(iii), if the waiver is clear, conspicuous, in writing, and subscribed by the cosignor, provided:
(i) No waiver shall be valid with respect to the first two thousand five hundred dollars ($2,500) of gross proceeds of sales received in any twelve-month (12) period commencing with the date of the execution of the waiver;
(ii) No waiver shall be valid with respect to the proceeds of a work initially received on consignment but subsequently purchased by the cosignee directly or indirectly for his or her own account; and
(iii) No waiver shall inure to the benefit of the cosignee’s creditors in any manner that might be inconsistent with the cosignor’s rights under this section.
(3) Proceeds from the sale of cosigned works covered by this section shall be deemed to be revenue from the sale of tangible goods, and not revenue from the provision of services to the cosignor or others, except that the provisions of this paragraph do not apply to proceeds from the sale of cosigned works sold at public auction.
Terms Used In Rhode Island General Laws 5-62-7
- art merchant: includes an auctioneer who sells art works at public auction, and except in the case of multiples, includes persons, not otherwise defined or treated as art merchants in this section, who are consignors or principals of auctioneers. See Rhode Island General Laws 5-62-2
- Artist: means the creator of a work of fine art or, in the case of multiples, the person who conceived or created the image, that is contained in or constitutes the master from which the individual print was made. See Rhode Island General Laws 5-62-2
- Contract: A legal written agreement that becomes binding when signed.
- Craft: means a functional or nonfunctional work individually designed and crafted by hand in any medium, including, but not limited to: textile, tile, paper, clay, glass, fiber, wood, metal, or plastic; provided, that if produced in multiples, craft does not include works mass produced or produced in other than a limited edition. See Rhode Island General Laws 5-62-2
- Creditors: means "creditor" as defined in the Uniform Commercial Code, § 6A-1-201(13). See Rhode Island General Laws 5-62-2
- Fiduciary: A trustee, executor, or administrator.
- in writing: include printing, engraving, lithographing, and photo-lithographing, and all other representations of words in letters of the usual form. See Rhode Island General Laws 43-3-16
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- On consignment: means that no title to, estate in, or right to possession of the work of fine art or multiple that is superior to that of the cosigner vests in the cosignee, notwithstanding the cosignee's power or authority to transfer or convey all the right, title, and interest of the cosignor, in and to such work, to a third person. See Rhode Island General Laws 5-62-2
- Statute: A law passed by a legislature.
- Uniform Commercial Code: A set of statutes enacted by the various states to provide consistency among the states' commercial laws. It includes negotiable instruments, sales, stock transfers, trust and warehouse receipts, and bills of lading. Source: OCC
- Work of fine art: means any original work of visual or graphic art of any medium that includes, but is not limited to, the following: painting; drawing; print; photographic print; or sculpture of a limited edition of no more than three hundred (300) copies; provided, that "work of fine art" does not include sequential imagery such as that in motion pictures. See Rhode Island General Laws 5-62-2
(b) Nothing in this section shall be construed to have any effect upon any written or oral contract or arrangement in existence prior to September 1, 2000, or to any extensions or renewals of a contract, except by mutual, written consent of the parties to the contract.
History of Section.
P.L. 2000, ch. 429, § 2; P.L. 2019, ch. 308, art. 1, § 25.