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Public Art Commissions - Good Practice

This paper has been commissioned by Public Art South West from Henry Lydiate, a barrister who has specialised in the law relating to the visual arts since he founded Artlaw Services in 1978, and in response to the many requests received for guidance in relation to public art commissions and the legal and practical issues involved in their successful execution and management.

Accordingly, this paper explores key lessons learned from artists, commissioners and art lawyers who have experience of these matters over many years. The paper warns against the ill-considered use and over-reliance on the use of so-called 'model' contracts, and gives reasons for this.

However, by saying this, we do not wish to imply that the AN Commissions Contract example, which is available from AN Publications and Arts Council England, [now out of print] is not a useful starting point and/or checklist for use in negotiations. Indeed the introduction to the AN Commissions Contract acknowledges this with a warning that the Contracts and Notes are intended to give only advice of a general nature and not on specific situations and problems, for which professional advice may be needed.

Historical Perspectives

During the 1970s in the UK and USA there emerged a new breed of lawyer offering specialist legal services to the arts, at low or no cost. Volunteer Lawyers for the Arts, based in New York City, was almost certainly the first such "pro bono publico" service, rapidly spawning many others; from Bay Area Lawyers for the Arts based in San Francisco, to Illinois Lawyers for the Arts in Chicago; other States and major cities followed. Infected by this movement across the pond, Artlaw Services was established in the UK between 1976 and 1978.

What was common to all these legal services was their development of forms of contract, in response to artists and arts administrators needs for basic legal tools to help themselves deal variously with commissions, sales, galleries, agents and dealers and copyright. These contracts or agreements were intended by the specialist art lawyers who drafted them to serve either as examples of good practice or, more usually, to meet the unique contractual needs of a particular artist and client or commissioner.

Pretty soon, however, certainly by the mid-1980s, there were in general circulation throughout the art world in the USA and the UK numerous adapted versions of what had been original bespoke documentation. Regrettably, these second and third generation documents came to be used as "quick fixes" by many artists and their clients, without giving them serious consideration. By the late 1980s, specialist art lawyers increasingly found themselves dealing with artlaw disputes arising out of naive or inappropriate uses of their original creations.

During the 1990s, therefore, art lawyers began to introduce into professional practice programmes for art students, practitioners and administrators, new techniques and solutions to meet their contractual needs. This has been a long and often painful process, which inevitably threatened the comfort zones of many who had come to rely upon these second and third generation documents. The most important corrective/educative step was to explain the drawbacks inherent in slavish use of a so-called "model" form of contract or agreement which appeared to, but rarely would, suit the needs of both artist and client/commissioner.

Confusing Practices

Such documents can be confusing both to artist and client because:

• they will have been originally created for a specific project, the requirements of which will not be the same as for any subsequent project
• they are rather like borrowing someone else's shoes (they will have been worn-in by the original first owner whose feet may be the same basic size as the second-hand owner, but will not fit exactly and eventually damage their feet)
• they will not meet the precise needs of the artist's client/commissioner whose "feet" will also require a "perfect fitting" to ensure they are satisfied that the agreement meets their specific needs
• they are often changed by the artist's and/or commissioner's attempting to customise them to meet their precise requirements and, by doing so, will usually undermine or degrade one or more key aspects of the original, so as to render it inappropriate (at best) or plain wrong (at worst)
• they are seen by artists (less often by commissioners) as being an easy, quick fix for aspects of professional practice which they would prefer (if possible) to ignore; and therefore inhibit the artist from learning and developing from useful experiences of the commercial dimension.

These are the key drawbacks of using such "off the shelf" contractual examples. But what are good practices, and how can artists and their clients acquire them?

Good Practices

A good practice tool kit should consist of three essential elements; a basic understanding and sound working knowledge of:

1. what it takes to achieve a legally enforceable and binding contract or agreement;
2. the essential ingredients of (in the case of public art commissions) what the artist and client need to do to make their project a success;
3. inter-personal negotiating skills.

What is a Legally Enforceable and Binding Contract?

It is not necessarily

• a piece of paper with words on it
• a document agreed by the contracting parties and "signed, sealed and delivered"
• something which only qualified lawyers can create.

These three points represent key myths about contracts which still exist in the minds of many artists and their clients.

In the UK, legally enforceable and binding contracts are created and successfully executed by everyone, every minute of every day, without thinking; we do not necessarily need lawyers or documents to do so, and most of us do not give them a second thought. For example: you go to a newsagent to buy today's newspaper, saying which one you want and offering the asking price, take your purchase and any change. That is a legally enforceable and binding contract; if the newspaper is last week's edition, you are entitled to your money back (for breach of contract by the newsagent); or, if you did not give the correct purchase price by mistake, you must do so or return the newspaper (because you are in breach of contract with the newsagent). Another example: you agree to sell your painting to a buyer for a named price, and you are given a cheque accordingly; the buyer takes the painting and you bank the cheque, but it bounces. The buyer is in breach of contract, and still owes you the agreed purchase price.

In both these examples, the most important point is not simply that there were breaches of contract, but the fact that in each case a legally enforceable binding contract had actually been made. How so?

UK law has for centuries allowed people to make legally enforceable and binding bargains/deals in their own ways, without dictating how they should do so; unlike in some foreign countries where commercial contracts are often governed by a strict mercantile (or commercial) legal code specifying that such contracts must be made in writing, signed by the parties, and/or witnessed or drawn up by a qualified lawyer. In UK law, save in certain exceptional cases (such as transfer of ownership of freehold property or of intellectual property rights), an agreement will be legally enforceable and binding if there is sufficient evidence that a commercial offer was actually made and accepted.

The important phrase in the previous sentence is "sufficient evidence" which, in its simplest form, could be the evidence given in court by the disputing parties that a deal was done and what its terms were; at its most complex, such evidence could take the form of a written agreement, drawn up by qualified lawyers for both parties, and signed in the presence of witnesses. At both these extremes, so long as the court is satisfied that there is "sufficient evidence" of the deal, then it will be recognised and given effect by the court.

Myths and confusion often arise because many people still (wrongly) believe that if there is no documentary evidence of the deal, then there is no deal. Not so; if necessary, the parties to the agreement could give evidence to the court about what they said and did, and so satisfy the court.

This simple and flexible approach of UK law, developed over many centuries and now adopted in many other countries, is intended to facilitate the making of legally enforceable deals by ordinary folk, without the need for the involvement and cost of lawyers. And, on the whole, the system works well.

In the case of artists and their clients, it is important at the outset of potential commercial discussions for both to appreciate that their conversations and behaviour may well result in a legally enforceable and binding deal being made (at least in the mind of the other party, if not also in their own mind) and for them to be absolutely clear what they intend, what has been agreed, and what has not.

Good practice suggests that all discussions and eventual agreements on a project are committed to writing; not to make the deal legally enforceable, but to avoid any confusion, misunderstanding, faulty memories, dishonourable changes of approach (and the like) and, if necessary, to assist any court to be satisfied that a deal was actually struck and what its terms were.

Essential Ingredients

Each public art commission will be unique, and it is not the purpose of this guidance to anticipate the unique needs of the artist, client, agent, funding body, eventual owner, or anyone else involved. What can be done is to offer a basic structure of the essential ingredients upon which the contracting parties should always negotiate and agree (or disagree). The suggestion is to divide negotiations into five separate phases, dealing with

1. origination and fee
2. fabrication, fees and costs
3. installation, fees and costs
4. maintenance, fees and costs
5. ownership, moral rights and copyright.

PHASE I Origination and Fee

It is important for artist and commissioner to be clear, at the outset, of the distinction between the aesthetic skill and labour required from the artist to develop an original design, model or maguette (on the one hand) and its execution, fabrication and installation (on the other hand). In too many cases, because the commissioner is willing to pay one (usually fixed) amount for the overall project, they cause the negotiations to focus from the outset on the executed and installed artwork to the exclusion of the most important aspect of any project: the artist's manifestation of the original idea/solution. Focusing upon this origination phase also has the distinct advantage of enabling both parties to ensure that the artist gets paid an agreed fee, even if the commissioner subsequently pulls out of the deal (a perennial occupational hazard). And so the parties need to identify an element of the overall budget which will be the artist's "origination" fee. It follows that the key elements of this phase should include discussion and agreement of at least the following:

• what original designs/models/maquettes the artist will produce for the commissioner's consideration (perhaps by referring to rough plans/drawings made during initial discussions or even earlier)
• the date by which such work will be produced
• a global fee to be paid to the artist for carrying out such origination work
• payment terms: for example, one third of this fee to be paid before theartist starts work (a demonstrable commitment by the commissioner,which is normal practice in the design, publishing, music and broadcastingindustries);one third when the artist has completed, say, two-thirds of theorigination work (so that the commissioner can comment on the work in progressand offertheir response); final third on completion of the original designs/model/maquette.

Some artists have difficulty negotiating any element of their global origination fee "up-front", and need to learn how to persuade the commissioner that this is a sound and reasonable practice, which demonstrates faith in the project by the commissioner and that, by the same token, the artist is placing faith in the commissioner by undertaking two-thirds (the artist decides how much this will be) of the origination work having only received one third of the origination fee. (For those interested in historical precedents, most renaissance artists were commissioned on this basis, though not necessarily being paid in three stages, but certainly being paid a substantial sum "up-front").

Clearly, depending on the size, scale of fee, and length of the overall project, this three-stage example could appropriately be two, four or more stages; (in the case of a recent major public art commission in the UK, the origination fee was paid in six two-monthly instalments over the two years it was agreed would be needed to develop the original designs).

At the so-called "rejection fee" stage (in our example, when the artist offers the commissioner sight of the original design when "two-thirds" completed), it is open to the commissioner to ask for revisions; in which case the artist may be able to absorb them during the final third stage, or may wish to re-negotiate the fee for the final third stage because the revisions may involve substantial new work. The commissioner may, for whatever reason, wish to walk away from the project altogether; in which case, the artist will have a straight choice: accept the "rejection" and ensure that the second third is paid for what will have been two-thirds of the origination work done; or try to secure payment of the final third.

Whatever the situation, the separation of this origination and fee phase of the deal from the other phases of negotiating, should ensure that both parties do not get confused over the need for the artist to be paid, come what may, for origination.

Assuming that this first phase is successfully negotiated and agreed, the next phase should be negotiated: fabrication.

PHASE 2 Fabrication, fees and costs

In this phase, the parties will be contemplating their having a successful design/model/maquette which will need to be fabricated; in which case, they will need to discuss and agree at least:

• fabrication materials, and their fitness for purpose
• completion date
• fabrication fee and associated costs (i.e. whether the artist will pay for the materials and labour out of the fabrication fee, or whether 'the commissioner will pay separately for these).

Some artists prefer to "front load" their origination fee, so as to absorb the fabrication fee and costs; others to keep their origination fee at low or no cost, and include it in the fabrication fee and costs phase. Whatever choice is made, it is important to distinguish between the fabrication phase and the origination phase (for reasons given earlier); just as it is important to distinguish the fabrication phase from the installation phase.

PHASE 3 Installation, fees and costs

Artists and commissioners all too often fail to address this important phase properly, and to keep negotiations separate from phases I and 2, with the result that appropriate expenditure is leading to unnecessarily bitter disputes very late in the day (and skimped or ignored altogether, often too late for appropriate financing to be secured).

Accordingly, both parties will need to discuss and agree:

• method and manner of delivery of the finished work (or its fabrication on site, if that is the case); and dates
• access to the site; and dates
• preparation of the site; and dates
• installation processes and techniques; and dates
• health and safety aspects of the installation process
• landscaping the site after installation; and dates
• appropriate signage (acknowledging the work, the artist, and/or commissioner as appropriate)
• costs of delivery, installation, landscaping, signage and relevant insurance arrangements; and who pays
• installation fees (if any) for the artist, and/or their independent contractors
• method and manner of payment of costs and any fees.

As with phases I and 2, artists may wish to "front load" all or part of these costs into their phase I fee, and require less or no payment for this third phase; or vice versa. There is no single best practice, and the artist should therefore evaluate (as will the commissioner) the risks of "front" or "back" loading their fees and costs, bearing in mind that circumstances may change over the life of the project (including changes of mind by the commissioner, and/or the site owners, and/or the financial backers/sponsors of the project).

PHASE 4 Maintenance fees and costs

Of the five key phases, the fourth is the most often neglected during initial negotiations, and therefore most frequently gives rise to disputes and, regrettably, litigation before the courts. Good practice requires all parties (not just the artist and commissioner, but also any financial sponsors, public art agencies, site owners and any others interested or involved) openly to discuss the life-expectancy of the work and its maintenance. (Again, historical documentation records that, as far back as the Renaissance, patrons /commissioners required the artist to guarantee a minimum period of years that the work would be expected to last in decent condition). Many issues need to be explored, including

• the method and manner recommended by the artist for maintaining the work
• frequency of health, safety and deterioration/maintenance surveys; and by whom
• a maintenance manual prepared by the artist
• arrangements for the artist being informed and consulted when maintenance or renovation is required
• clear responsibilities of the owners of the site and/or owners of the work (if not the same individual/body)
• responsibility for costs of maintenance
• payment of maintenance and/or consultancy fees to the artist (if any)
• public liability insurance and payment of premiums.

Each of these key issues (and other detailed ones related to them) requires in-depth discussion and foresight of the consequences of the installed work failing to be maintained, being vandalised, or revealing an inherent design or fabrication fault (most personal injuries and/or damage caused or contributed to by public art works appear to result, in whole or part, from design or fabrication faults).

It cannot be stressed enough the need for financial sponsors and commissioners to plan for the long-term costs of maintaining public art work; experience reveals that such essential good practice is more often neglected than observed.

The key issues of this fourth stage often revolve around eventual ownership of the work: the fifth interrelated phase of negotiations.

PHASE 5 Ownership, copyright and moral rights

Who will eventually own the work? The answer is not always simple, especially five, ten or twenty-five years after installation, and when all original documentation may have disappeared (if it ever existed). There is a need for both parties and all others involved in the project to specify at the outset who will eventually own the work; it could be, for example,

• the artist (even though they do not own the site)
• the commissioner (event though they do not own the site)
• the site-owner (even though they have not paid for the work or its installation)
• the financial sponsor (even though they do not own the site)
• some other person/beneficiary.

Whoever it is to be, clear documentation needs to be created (as if creating the title deeds to freehold property); preferably by way of a contract for sale (if the work is to be bought as part of the deal), by way of a "deed of gift" (if that is the case), or by any other evidence of transfer of ownership. The risk is that just because the work is no longer in the artist's possession or control, the person or body which does have possession or control believes (perhaps wrongly) that they are its owners (until the work deteriorates and/or causes injury or damage, in which case fingers will be pointed in ill directions).

The serious question or injury or damage caused by the work also relates to the equally important legal issue of the artist's moral rights; that is to say, the artist's enforceable legal right to prevent (or be compensated for) the work being treated in a derogatory manner (by way of any addition, amendment or alteration to it, or deletion from it). These legal rights were enacted by the Copyright, Patents and Designs Act 1988, and require that those in possession or control of a public artwork must ensure that no such derogatory treatment occurs; and must take appropriate steps to protect such works for the lifetime of the artist and for seventy years after their death. This legal duty should cause all parties involved in such commissions to reflect very seriously, at phase 4 in the negotiations, about who will be responsible for maintaining the work for its (agreed) lifetime; it should also cause the parties to agree on whether the work is site specific (i.e. not to be removed).

Naturally, the 1988 Act prevents anyone other than the artist from reproducing or merchandising copies of their own original works; including anyone who owns such works or has them in their possession or control. In the case of public artworks, the 1988 Act allows such works to be reproduced without the artist's permission in two-dimensional mediums (such as photographs, drawings and prints). However, only the original artist has the legal right to make three-dimensional reproductions or adaptations of their original work. Good practice requires that the copyright position is made clear throughout negotiations and eventual agreement.

Interpersonal Negotiating Skills

There are five key skills which contracting parties (and their agents/brokers) should develop and utilise:

• preparation: consider and list all of the matters discussed above and develop "bottomlines" and negotiating options for agreement
• negotiation: be ever mindful that negotiation is not the same as consultation, and that discussions are aimed at arriving at "win, win" solutions (i.e. that both contracting parties and any others involved or interested expect to, and should always, achieve a successful outcome)
• notation: both parties should make contemporaneous notes of all their telephone conversations and face to face meetings; to refresh their memories later, to avoid subsequent disputes or changes of mind, and to assist in formal documentation
• documentation: the parties should agree which of them will process their notes into a formal record of the conversations/meetings and send the resulting letter/note to the other party for their formal amendment/agreement (in the design industry, such formal notes are appropriately called "client contact reports")
• duplication: always keep a copy for later reference.

Specimen Contracts

Be wary of using contracts which were usedby others for their specific purposes (for reasons given earlier); and only usethem (if at all) to cull ideas for the matters needed to be discussed, negotiatedand agreed for the specific project being created. However, listed below are suggestions for topics/headings that could be included in a contract.

Depending on the scale and importance of the project, the parties may benefit from seeking the advice and assistance of a solicitor who specialises in the law relating to the visual arts; both artists and commissioners will need to build in the likely costs of their doing so when planning the overall costs of the project and the artist's fee structure.

The Legal Framework: Commission & Sale Contract

List/Structure

Stage One: Origination and Fee

• what is required?
• by when?
• global fee
• staged payments

Stage Two: Ownership and Fees

• contract for sale
• transfer of ownership and title
• artists’ fee?

Stage Three: Maintenance and Fees

• maintenance manual
• maintenance responsibilities
• maintenance costs
• artists’ fees?

Stage Four: Intellectual Property Rights

• copyright
• moral rights

Stage Five: Housekeeping

• guarantee of originality
• indemnities against intellectual property breaches
• guarantee of longevity
• product liabilities
• insurances
• accounting and auditing
• ownership of original artwork/models/maquettes
• disputes/arbitration/mediation
• written nature of the deal
• proper/governing law
• independent legal advice
• any other matters

The Legal Framework: Commission for Services & Marketing

List/Structure

Stage One: Origination and Fee

• what is required?
• by when?
• global fee
• staged payments

Stage Two: Merchandising and Fees

• what forms/mediums for reproduction/use are required?
• how many?
• for how long?
• in what territories?
• exclusivity
• for what fees? Royalties; or flat fee; or both?

Stage Three: Intellectual Property Rights

• copyright
• design right
• moral rights
• trade marks
• patents
• confidentiality

Stage Four: Housekeeping

• guarantee of originality
• indemnities against intellectual property breaches
• accounting and auditing
• ownership of original artwork/models/maquettes
• options to renew/extend
• disputes/arbitration/mediation
• written nature of the deal
• proper/governing law
• independent legal advice

© Copyright Henry Lydiate 2007.All Rights Reserved

Further advice and reading at www.artquest.org.uk/artlaw/

For further information, email: [email protected]