+ Introduction

The FARE Contract is a collaboration between Virginia Broersma and Susan Schwartz arising from discussions with artists and art-world professionals. The FARE Contract has been designed to remedy generally acknowledged inequities in the art world, particularly artists’ lack of control over their work and inability to share in the increase in value of their work after it is sold. It is based on the Artist’s Reserved Rights Transfer and Sale Agreement (the “Artist’s Contract”), drafted by curator Seth Siegelaub and attorney Robert Projansky in 1971. The inequities in the art market, which led to the original Artist’s Contract, are even greater today, and on the 50th anniversary of the Artist’s Contract it is time to reframe its terms for today’s realities and technology.

These instructions and Contract do not constitute legal advice and do not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

+ What the FARE Contract does for you

The Contract allows you to select the terms that are most important to your concerns and practice. It is a legal tool to establish continuing rights in your work.

The Contract provides for notice to you each time the work is sold or transferred. The Contract also enables you to maintain a record of ownership each time the work is sold or transferred. In particular, the Contract allows you to select terms providing for the following:

1. Receiving a percentage of any increase in value each time the work is transferred;
2. A non-resale clause to limit the transfer of the work for a period of time;
3. The right to keep the history of ownership of the work and to provide proof of provenance if the terms of the Contract are complied with;
4. Notice when a work is to be exhibited and the ability to veto a work from being in an exhibition;
5. A share of any exhibition fees;
6. A fair wage for talks or presentations in connection with exhibitions of the work;
7. A fair wage for installing and repairing the work;
8. The right to be consulted if repairs become necessary;
9. The right to borrow the work for a period of time every five years (at no cost to the Collector) for exhibitions, including but not limited to a retrospective of your work or for your own use;
10. Ownership of the copyright in the work;
11. All reproduction rights in the work;
12. The right to disclaim authorship of the work if the terms of the Contract are not complied with;
13. The economic benefits accrue for life and for the life of a surviving spouse or domestic partner plus 21 years (to benefit any minor children);
14. The right to assign the resale royalties or interest in the work to others; and
15. The right of first refusal should a collector wish to sell your work.

The Collector benefits in that they will have an equitable and ongoing relationship with you; the assurance that the work is being used in accord with your intentions; and, if the terms of the Contract are adhered to, a clear chain of authorship and ownership of the work (provenance).

+ How the Contract works

The online FARE Contract is drafted by answering a series of questions about which terms you wish to include. Once complete, DOCX and PDF files of your contract are generated for you to download and send to your buyer for signature. Here is the process:

1. Review the terms listed above and decide which terms you wish to include in your Contract.

2. In some situations, the Collector may wish to also make certain changes, or to add or delete terms from the contract. If these changes are acceptable to you and your attorney, follow your attorney’s instructions carefully regarding modifying the original draft.

3. Once you have completed your online questionnaire, download your files, review them and correct formatting and any errors, and send to your buyer for signature. Then follow the instructions below for enforcing the Contract.

+ How the Contract is enforced

There are many ways to enforce the provisions of this Contract. The best method for you will depend on several factors, including the medium of your work and its intended audience. In what we will call the “old school” method, you attach a notice that the work is subject to the FARE Contract to the artwork (or to its documentation if it is a performance work, conceptual work or ephemeral artwork). Each time the work is transferred, a Transfer Agreement and Record of Transfer (TART) is filled in by the Collector and the new owner (the “Transferee”) and sent to you; you must keep track of each transfer. In what we call the “technology assisted” method, tools such as QR codes, websites, blockchain registries and “Smart Contracts” are used to track each transfer of the work. These methods are described in greater detail below.

Old school method of enforcing the contract:

1. Two paper copies of the FARE Contract are made. You and the Collector sign both copies. You keep one copy, and the Collector keeps the second copy. Both copies are considered to be “original” versions (counterparts) of the contract.

2. The TART form is filled out in duplicate; you and the Collector each keep one copy.

3. The Notice is affixed to the artwork (or to the documentation for ephemeral, performative or digital works).

4. For future transfers, the Collector makes three copies of the TART from their original, showing the value the Collector and the new owner (“Transferee”) have agreed to. If there is an increase in value, the Collector remits an agreed-upon percentage of that increase to you. One copy of the TART is sent to you, the Collector retains the second copy, and the new owner (Transferee) is provided with the third copy.

5. Within 30 days of each transfer, the Transferee must enter into a new FARE Contract with you (or your designated assignee) to abide by the terms of the TART; the Transferee will thereafter be known as Collector 2 (or 3, 4 or 5, as the case may be). If they fail to do so, you may disclaim authorship of the work.

How to use technology to aid in the enforcement of the contract:

• You can use a blockchain registry to record the sale of the work, the identity of the Collector, and the Contract.

• You can include an image of the work on your website, with a statement that the work has been sold subject to the FARE Contract, and links to the blockchain registry and to your contract.

• You can note on your website and other social media that you utilize the FARE Contract for all sales, so that anyone who obtains your work will have notice of the FARE Contract, in addition to the Notice affixed to the work.

• You can affix a QR code to the back of your work, to direct future owners to your website, blockchain registry, or social media where the FARE Contract terms may be found.

• These methods will make it difficult for subsequent purchasers of the work to claim they were unaware that the sale was governed by the FARE Contract.

• In the event the blockchain registry employs “smart contracts,” you can prevent title from passing to the next owner by stipulating the conditions that must occur before title to your artwork can pass to the new owner. These conditions may include payment to you of your resale royalty and the new owner’s entering into a Contract to pay resale royalties and to follow the terms of your FARE Contract.

• If a purchaser sells or transfers your work without going through the blockchain registry, the chain of title will be broken. Whoever acquires your work will not have good title and won’t be able to prove that the work they possess is authentic. This could greatly diminish the value of the work in the secondary market.

+ The three questions to consider in each sale or transfer

1. What rights do I want to assert in this Contract?
2. How do I document each sale or transfer?
3. How do I ensure that everyone knows about the Contract?

+ Definitions

As used in the FARE Contract, these words have the following meanings:

SELL OR TRANSFER: To Sell or Transfer means to sell, transfer, give, grant, assign, trade, barter, exchange, convey, donate, alienate or pass by inheritance, bequest, gift or operation of law.

COLLECTOR: Collector means the person who, or entity which, acquires the Work, as well as their heirs, assigns, beneficiaries, devisees and successors in interest.

TRANSFER AGREEMENT AND RECORD OF TRANSFER (“TART”): Transfer Agreement and Record of Transfer, or TART, means the form appended to this FAIR Contract and incorporated by reference herein.

NON-PROFIT INSTITUTION: An organization operated for exempt purposes as set forth in Internal Revenue Code section 501(c)(3).

ADDRESS: The residence or business address of a party to this Contract, or the address of a party’s agent for service of process.

PRICE OR VALUE: The Price or Value as used in this Contract means:

a) The actual selling price if the Work is sold for money; or

b) The money value of the consideration if the Work is bartered or exchanged for a valuable consideration; or

c) If the work is transferred in any other manner, tthe fair market value of the Work, as determined by an appraisal by a disinterested USPAP-certified appraiser or by comparable sales, or

d) In the event the Work is transferred to a Non-Profit Institution or body acquiring the Work by gift, it is conclusively presumed that the value of the Work as reflected in the donor/transferor’s Federal Income Tax documents is the value of the Work on the date of such transfer.

PROFITS: The Price or Value received by the Collector upon any Sale or Transfer, or receipt of insurance proceeds for the loss, theft, damage or destruction of the Work less the price or value parted with by the Collector upon acquisition of the Work.

In the event that a current duly executed TART is not timely filed as required by this Contract, the Profits shall be computed as though such TART has been duly executed and timely filed, with a Price or Value set as the actual market value of the Work at the time of the current transfer or at the time the Artist discovers such transfer; whichever of these two dates provides the greatest Profits shall apply.

TRANSFEREE: A person who, or entity which, acquires the Work from the Collector by sale or transfer.