When a gallery holds artwork owned by the artist, there is a bailment relationship between the gallery (bailee) and the artist (bailor). The gallery owes a duty to the artist as a bailee to take reasonable care of the artwork.
In summary, bailment occurs where one party (the gallery) takes temporary possession of another’s goods (artist's work), usually for a short period for a specific purpose, sale or exhibition.
Ownership of the artwork does not transfer, but stays with the original owner (artist). The artwork should be returned by the gallery (bailee) to the artist (bailor) upon certain predetermined condition.
If the gallery has lost the artwork and could not return the artwork to the artist as agreed, the gallery could be liable to the artist under bailment and be held responsible to pay for the artwork at a fair market value. Disputes often arise when it comes to the value of the artwork if no provision has been made in the contract entered into between the gallery and the artist to cater for such situation.
In deciding on the fair market value, reference could be made to the selling price of the work or the price of similar sold artwork.
An artist should consider taking out legal action if no agreement could be reached on the payment for the lost artwork.
For Hong Kong Art Law Services, please contact CHOW & CHEUNG [Tel: +852 2856 3799 or Email: cac@ccsn.hk]
www.ccsn.hk
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