By William F. Zieske, Coco Soodek & Matt Petersen, Attorneys at Law

You would not be the first person to take a commission without a written contract. Asking for a contract signals distrust, and negotiating often involves delays and lawyers. You may have grown accustomed to closing sales with a handshake or an invoice. But there is a vast difference between selling your work off your studio wall and promising a client to create a commissioned work. Your obligations do not end when the buyer walks out the door — that’s just the beginning. And the daunting task of balancing your creative freedom with your client’s expectations might be the least of your worries, if the oral agreement you just made goes sour.

The thing about oral agreements . . .

You may prefer to keep things informal to give yourself an out. But it is likely that your oral promise will be a legal contract. Most agreements do not need to be written or signed, and only require:

• that the parties be competent;
• a proper subject matter;
• legal consideration (something of value given or promised in return); and
• mutual assent to the contract.

Generally, once you and your client show agreement to exchange a commissioned artwork for something in return, you and your client are bound by your handshake. However, a particularly knotty set of laws called the statute of frauds may make your bargain unenforceable if not in writing and signed. The general rule is that neither party can be bound to an oral agreement if it cannot be performed fully within a year, or requires payment of $500 or more for goods. But the devil is in the details. Many states focus on your unique and valuable services rather than on the tangible end result — making your oral contract enforceable. It can also be enforceable if your state upholds oral contracts for specially manufactured products and:

• you made the artwork specially for the buyer;
• the artwork is not suitable for sale to others; and
• you begin to create the artwork before your client cancels the commission.

If the commission agreement was made with an out-of-state buyer or at an out-of-state exposition, determining which state’s law applies makes these exceptions even more devilish. Further, you should be extra careful when considering a commissioned job with a municipality. Courts generally find that an oral contract cannot be implied against a municipality.

Finally, even if your contract is unenforceable, you or your client may still have quasi-contractual rights, based upon the expense and time committed in reliance upon promises made, under a legal claim for estoppel. Estoppel prevents one party from taking action that is opposite to his prior actions or statements if it would harm the other party.

So you do have a contract . . . what does it say?

Assume the handshake did seal an enforceable deal. Exactly what are you and your client bound to, besides creating the commissioned piece and paying for it? Perhaps the greatest risk in the informal deals you make is defining your bargain. The terms of your deal depend on what you and your client remember, and which side’s version of the facts is more convincing. Uneven memories lead to frustrating cases of he-said, she-said. Without words on a page, a contract dispute often finds its way to lawyers and the courthouse. The high cost of litigation should be weighed in your decision whether to put a commission in writing, as well as in deciding whether to enforce a contract, or get out, if things go badly.

Things go badly. Can you get out?

Many things can happen to make you want or need to break your deal — thieves could steal the piece, or the shipper could drop it; you could break your arm, or the cost of materials could skyrocket. Your commercial success could impair your ability to finish on time. Will this alleviate your obligations under the contract?

Generally, none of these events are a legal basis to escape from the contract. But, you may find an escape hatch from your contractual obligations through the legal defenses of impracticability or unconscionability.

The law may completely excuse you from the contract if a surprise makes it wholly impracticable for you to deliver the commissioned work. However, this is a rare defense, usually limited to illegal contracts or the death of a person, or destruction of a thing, necessary to perform. For instance, if you were commissioned to sculpt from a rare wood found only in a nation that is subsequently embargoed, a court may find the contract impracticable and excuse you from producing a sculpture in that wood. Note that neither a better offer nor a mere increase in material costs makes a contract impracticable.

A court can also excuse an artist from a contract if the contract is unconscionable. For the defense of unconscionability, you need to prove you were essentially forced into what was a bad deal from the start — that the contract’s terms are unreasonably favorable to the client and that you did not have a meaningful choice in the bargaining process about whether and how to enter into the deal.

Once you finish, you may change your mind about selling or prefer to sell the work to another buyer. It is possible that the client might let you walk away from the contract for nothing more than return of the fee you already received. But he also can bring you to court and demand either damages or specific performance, which would be a court order to deliver the artwork. Specific performance is only possible when a contract involves something unique (it is usually used to force the seller of real estate to complete a sale contract), but if you have not completed the work, your client generally cannot force you to finish.

In some cases, the client may try to get out of the contract and sue you for money damages — perhaps the difference between the price you had agreed to and the price demanded by another artist to create a similar work. However, it can be difficult for the buyer to prove that the other artist’s work is comparable to what you would have created, giving you defenses to the amount of damages you are obligated to pay.

Is there justice for a crooked client?

What happens if your client hates the piece? Maybe he declares it is "too weird" or not the "right colors." Maybe he takes the work, but the check bounces or never arrives. These complaints may not be a legal excuse for him to escape the contract. After you give your client a reasonable opportunity to accept and pay for the work, ask your new lawyer to prepare and send a certified letter demanding payment or offering a compromise. Hopefully, the letter will shake loose good will or fear from your client, bringing him to the bargaining table or the bank. Consider the substantial expense and time saved by avoiding litigation and make sure your settlement agreement is written by a lawyer.

Sometimes litigation becomes inevitable or at least the right choice. Both sides will have a chance to tell the court their recollection of the oral contract, and why the finished piece conforms, or fails to conform, to its terms. It is possible that neither side will be happy with the litigation result, particularly after paying legal fees. Even if you win in court, you won’t be winning the lottery. Legally, you are entitled to recover only the benefit of your bargain — enough to return you to the position you would have been in had the client upheld his end of the bargain. And, win or lose, you will have to pay your own legal fees.

If, after litigation, you have not delivered the work to your client, you will probably not be able to recover the commission price and keep the artwork. You may be required to make reasonable efforts to sell the painting for the best possible price in order to mitigate your damages. Following sale, your damages would be any amount by which the commission price exceeded the actual sale price, plus potentially your reasonable costs to store and sell the work.

However, if the artwork cannot be resold (for example, if it is ephemeral, like an ice sculpture), you may be entitled to receive damages valued at the entire commission price. Finally, if your client has the work, but refuses to pay, you could seek to recover the commission price, or fight to get the work back through a legal action for replevin, but not both.

The least you can do . . .

There are some steps you can take now to try and minimize problems resulting from your commission without a written contract. Although none of these will reduce all of your risks, they may help you manage them:

• Write down all of the details you remember about your conversations with your client and what you think you and your client agreed to during those conversations. Consider whether you should confirm your understanding of your bargain with your client by e-mail.
• Maintain full insurance coverage for studio, materials, works in process and finished artwork, and keep insurance schedules of your works up to date.
  Arrange to show your work to your client one or more times while it is in progress to avoid any surprises at the end.
• Resolve all issues about copyright ownership, including entitlement to registration.
  Provide your client with instructions for restoration and maintenance of your artwork in accordance with the Visual Artists Rights Act, to preserve and protect your work to the fullest extent of the law.
• Most importantly, make sure you get an experienced, art-savvy lawyer to help you sort through these issues — and draft your written contract for the next commission. 

William F. Zieske, Coco Soodek & Matt Petersen, Bryan Cave LLP Art Law Group
www.bryancave.com.  This article is for informational purposes only and is not legal advice.