California is one of many states with a standard regime of protection for artists with work in galleries. (Civil Code § 1738.) The law enacts the basic protections necessary for artists, without some of the extra steps taken in states like Massachusetts or Oregon.
The statute applies to artists (or artists’ heirs) selling the artist’s own work on consignment through a dealer: defined as anyone “engaged in the business of selling works of fine art,” other than at auction.
Any work delivered to a dealer for sale or exhibition on commission, fee, or other basis of compensation is considered to be a delivery on consignment under the statute. Any such work is considered trust property, and the dealer is considered the agent of the artist or purposes of sale and exhibition of the work. The work is protected from claims by creditors of the dealer, and the dealer is responsible for loss of or damage to the work.
Funds from sale of the work are considered trust funds held for the benefit of the artist, and also protected from claims by creditors of the dealer. In the event the dealer purchases the work for their own accounts, the work remains trust property until the artist is paid in full. The provisions of the California statute cannot be waived.