Friday, December 19, 2014

Consignment or Rep: Doll Deal Gone South

Dear Rich: Did I make a consignment agreement? I was at a doll show selling manufactured porcelain dolls. The woman at the next table was selling her dolls which are handmade. I was impressed with her work and offered to exhibit her dolls for sale at any of the other shows in New Jersey that I would be attending and I would like to show her dolls to some store owners and I would try to interest a few popular mail order catalogs. She agreed and gave me some of her pieces. As security measure (as we were strangers) I left with her one of my dolls that I was selling which was of comparable value to the merchandise she had given me. We did not agree on any other terms. Unfortunately, I didn't have much luck. I tried several store owners, two doll shoes and two catalogs without any interest. I had reported back to the artists at least three times during the seven months I tried to sell her work.I contacted the artist to arrange the return and exchange of our merchandise. She then told me that since I held her merchandise so long I had to pay for (buy) two pieces which she felt she could have sold at her shows and that she felt would not be her current styles in the future shows. She told me I would have to send a check for those 2 pieces ($90.00)as well as a check for $25.00 for shipping charges for her to return my piece to me. I would also have to ship her merchandise back to her at my expense. We went back and forth and I even offered to drive from New Jersey to Pennsylvania to bring back her dolls. She said in her last correspondence that she would allow for a return of her merchandise with a change being that I would still have to send a check for $25.00 to cover cost of returning my piece to me and that if she felt she could "set the other 2 pieces out for sale" there would be no cost to me. She would not agree to any other conditions. You inquired as to whether you had made a consignment deal and we don't think so. In a consignment arrangement, a gallery or store agrees to sell merchandise and pay the artist only if the merchandise sells. Otherwise the merchandise is returned. Your arrangement seems to be a rep agreement -- an arrangement in which the rep seeks to promote an artist's work to various sources, and in return receives a commission from the sale.
Insert terms here. You reached an agreement on something at that first meeting -- after all the artist accepted your doll and you took her merchandise with a promise to promote it. We're going to presume a contract was formed (although that might be incorrect if you never agreed upon financial compensation). In any case, contract or not, we think the result would be the same if the case went before Judge Judy. She'd probably seek to put the parties back where they were before the arrangement was made -- a remedy known as restitution. In other words, you'd return the dolls to each other and each pay the respective shipping costs.
What about the demanding artist? You have no legal obligation to abide by the artist's demands unless you're seeking a speedy resolution and the return of your doll. If you do decide to exchange dolls, we'd suggest you exchange paperwork confirming the terms of the resolution. And of course, if you want to rep an artist in the future, we'd suggest using a rep agreement like the one we've included in our  Craft Artist's Legal Guide.