Report Title:

Consignment of Fine Art

Description:

Establishes the rights and duties of artists and art dealers under an agreement for the consignment of fine art.

THE SENATE

S.B. NO.

2627

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to consignment of fine art.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter    

CONSIGNMENT OF FINE ART

   -1 Definitions. As used in this chapter:

"Art dealer" means a person engaged in the business of selling works of fine art, other than a person exclusively engaged in the business of selling goods at public auction.

"Artist" means a person who creates a work of fine art or, if that person is deceased, that person's heir, legatee, or personal representative.

"Consignee" means an art dealer to which works of fine art are delivered by an artist pursuant to a consignment.

"Consignment" means a transaction, regardless of its form, in which an artist delivers to an art dealer fine art created by the artist, for the purpose of exhibition or sale, or both, on a commission, fee, or other basis of compensation, but does not include an outright sale in which the artist receives full compensation for the work of fine art upon delivery.

"Consignor" means an artist who delivers works of fine art to an art dealer pursuant to a consignment.

"Fine art" means a painting, sculpture, drawing, photograph, work of graphic art (including an etching, lithograph, offset print, silk screen, or a work of graphic art of like nature), a work of calligraphy, or a work in mixed media (including a collage, assemblage, or any combination of the foregoing art media).

"Person" means an individual, partnership, corporation, limited liability company, association or other group, however organized.

   -2 Consigned work held in trust; parties' rights and duties. (a) A consignee, after taking delivery of a work of fine art from the consignor, shall constitute an agent of the consignor for the purpose of sale or exhibition of the consigned art within the State. The consigned art shall constitute property held in trust by the consignee for the benefit of the consignor, and the consignee shall be responsible for the loss thereof or damage thereto.

(b) No title to, estate in, or right to possession of, the consigned art, superior to that of the consignor, shall vest in the consignee, notwithstanding the consignee's power or authority to transfer and convey to a third person all of the right, title, and interest of the consignor in and to the consigned art. The consigned art shall not be subject to the claims of a creditor of the consignee.

(c) Proceeds from the sale of consigned art shall constitute funds held in trust by the consignee for the benefit of the consignor. The proceeds shall first be applied to pay any balance due to the consignor, unless the consignor expressly agrees otherwise in writing.

(d) If, after taking delivery pursuant to a consignment agreement, a consignee purchases the consigned art for the consignee's own account, the work shall continue to be held in trust for the consignor until the consignee has paid the consignor in full. If the consignee resells the work to a bona fide purchaser before paying the consignor in full, the proceeds of the resale shall constitute funds held in trust for the benefit of the consignor, to the extent necessary to pay any balance still due to the consignor, and such trusteeship shall continue until the fiduciary obligation of the consignee with respect to the consignment is discharged in full.

   -3 Waiver of rights prohibited. Any contract or agreement that purports to waive the provisions of this chapter shall be void.

   -4 Existing consignment contracts. This chapter shall not apply to a written contract executed prior to the effective date of this chapter, unless the parties agree in writing to its application, or the contract is extended or renewed after the effective date of this chapter. Where this chapter conflicts or is inconsistent with chapter 490, this chapter shall prevail."

SECTION 2. This Act shall take effect upon its approval.

INTRODUCED BY:

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