Q&A – Selling online

selling online

Question: My gallery space is shut and I want to start selling my stock online or via email. What rules do I need to keep in mind when doing so?

Answer: There is nothing to stop you from selling artworks online or using email.  You can join an existing online platform, or simply advertise artworks on your website and sell them using the the telephone, Skype, FaceTime or another voice app, or email, text or a digital app such as WhatsApp. Some dealers have their own online platform, and in due course, if you do not have your own online selling platform, you could commission one, although an exclusive online selling platform requires a significant investment.

If you start selling art remotely without relying on an online selling platform to handle logistics and payment, consider the following questions – it is assumed that English law applies:

  1. How do I conclude sale contracts remotely?  A valid contract can be concluded orally or in writing.  S. 4(1) of the Sale of Goods Act provides that ‘subject to this and any other Act, a contract of sale may be made in writing [   ], or by word of mouth, or partly in writing and partly by word of mouth, or may be implied from the conduct of the parties.’ A contract for the sale of specific goods is typically made when one party has made an offer to sell or buy the goods for a specific price and the other party has accepted the offer.  When the contract is concluded at a distance and there is more than one country involved (e.g. the seller and the artwork are in country A and the buyer is in country B when the contract is made), the analysis of whether there is a contract at all and if there is one, where and when the contract was made, can be complex. In doubt, seek legal advice. The question of whether there is a binding contract is relevant because it will determine when you and the buyer are bound to perform your respective obligations, including, for the buyer, the obligation to pay the price. It is also relevant to the question of whether you can sell the art to someone else.  If you have contracted to sell the art to X, you cannot sell it to Y, or there may be trouble ahead.
  2. How do I invoice? The invoice can be sent to the buyer by email or communicated to him on any digital platform. If terms of sale are printed at the back of your invoice, make sure that you communicate them to the buyer with the invoice.  Remember that there is a risk that the buyer might claim that if terms of sale are communicated to him after the contract was made, the terms of sale are not binding because they were introduced after the contract was made. To minimize the risk that such claim might succeed if the dispute were brought before the courts, either you make it clear to the buyer when you make the contract that you sell subject to your terms of sale and you make them available, say, o your website, or you communicate your terms of sale to the buyer when you make the contract. In any event, it is good practice to require the buyer to acknowledge that he has read and understood your terms of sale.  If you do not have terms of sale, it is advisable to record the terms of the contract of sale in writing.  At its simplest, the key terms of a sale contract are:
    • A description of the art
    • The price
    • The date and place of payment
    • Transfer of ownership and risk
    • The date and place of delivery
    • Any representations and/or warranties given by seller to buyer
    • Applicable law and jurisdiction.
  3. How do I arrange payment? Payment can be made by bank transfer, Paypal or credit card. Consider the risk of fraud. The Rijksmuseum Twenthe in Enschede in the Netherlands has sued Simon C Dickinson, the London art dealers, because after a long email negotiation to purchase a painting by John Constable, hackers hijacked the exchange, posing as Dickinson, and convinced the museum to pay £2.4 million into a Hong Kong bank account. The museum claims that Dickinson should have known about the fraud.  Dickinson say that the museum should have verified the account before making payment. Such cases are on the rise and sellers and buyers are advised to exercise caution.
  4. Where the buyer qualifies as a consumer, he has certain rights if he buys online that he does not have if he buys at the gallery. The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the “Regulations”) set out mandatory information that must be provided to consumers buying at a distance.  The information includes, but is not limited to, your (the seller’s) identity, whether you are acting on behalf of another trader and if so, the name and details of the other trader, the main characteristics of the art, the total price, payment and delivery arrangements, and details of the conditions, time limits and procedures applicable to the right to cancel (see below). This information must be available before the consumer is bound by the distance contract and set out in a clear and comprehensible manner.

For distance contracts concluded by electronic means, you must ensure that when placing the order, the consumer-buyer explicitly acknowledges that the order implies an obligation to pay. If placing an order entails activating a button or a similar function, you must ensure that the same is labelled in an easily legible manner only with the words ‘order with obligation to pay’ or a corresponding unambiguous formulation with the same effect. You must also ensure that any trading website through which the contract is concluded indicates clearly and legibly, at the latest at the beginning of the order process, whether any delivery restrictions apply and which methods of payment are accepted. Once a contract has been concluded, you must send a confirmation to the consumer confirming, in particular, the details of the order.

Consumer-buyers have the right to cancel distance sales at any time during the statutory cancellation period, which is 14 calendar days from the day on which the consumer or his agent takes possession of the artwork. The consumer can exercise such right without giving any reason and without incurring any liability, except in limited circumstances. Where the right to cancel is exercised by the consumer within the statutory period, you must reimburse the consumer. Where the right to cancel applies and you fail to inform the consumer of this right, the Regulations automatically extend the cancellation period by 12 months, unless you subsequently notify the consumer of the right to cancel, in which case it runs for 14 days from the date of notification. Information on the right of cancellation and the model cancellation form must be given or made available to the consumer before the conclusion of the contract (available at Schedule 3 of the Regulations http://www.legislation.gov.uk/uksi/2013/3134/contents/made).

If the buyer is a business, the consumer rights outlined above do not apply. Nevertheless, you are still required to provide certain information on your website including a description of the different technical steps to conclude a contract, the confirmation of where such contract will be filed and accessible, the technical means for correcting input errors prior to the placing of an order and the languages offered for the conclusion of the contract.