No Action After the Down Payment

Here’s the situation . . .

  1. Someone gave you a down payment on one of your artworks.
  2. There was no agreement that outlined terms of payment.
  3. Months or even years have passed.
  4. The would-be collector hasn’t returned letters, emails, or phone calls. You’ve tried!
Sandy Askey-Adams, Quiet Evening 2

©Sandy Askey-Adams, Quiet Evening 2. Pastel on panel. Used with permission.

Deep Thought Thursday

What do you do?

Do you put the artwork back on the market?

What would you do differently next time?

 

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47 comments to No Action After the Down Payment

  • This is a good reminder to make sure an invoice or agreement is in place – with note as to what happens if balance is not paid. In this situ with no agreement, I would send a registered/certified letter one year after the first payment giving them 30 or 60 days to pay balance or piece returns to available inventory – and keep the letter and the mail receipt.

  • beckynielsen

    This happened to me at a craft fair – there was not a lot of money involved, fortunately, so I don’t feel badly just putting the piece back on the market. I called repeatedly, tried to make arrangements to get the finished piece to the customer, and while I spoke to her a couple of times, she never was able to meet or even send me her address and a check.

    Certainly with a larger piece, the idea of putting some agreement in place as suggested above would be a good idea.

  • This is a very timely question for me and I’m curious to read comments.

    A little over seven years ago a couple came to me to do a large oil painting that in their words wasn’t really a portrait, just their two girls in the distance walking down the beach with “your wonderful skies”. (They wanted to avoid my higher portrait rate.) They verbally gave me total artistic freedom and made a one-third downpayment, with the remaining balance to be paid in two payments as the painting progressed.

    I wrote out a simple, dated receipt noting the size, medium, price, subject, total amount, payment and balance and we agreed on a photo shoot date.

    I wound up doing two photo shoots producing over 400 photos, blowing photos up so we could play paper dolls with different backgrounds, and went through countless, lengthy, and often heated (between husband and wife) meetings before a general layout was agreed upon.

    I proceeded cautiously. When I completed the background (so the painting was 2/3 done), I thought it wise to do cutout sketches of the girls to show them in several locations for an agreed-upon placement.

    They agreed on placement and agreed to make their second one-third payment, with the final one due upon completion. I was told it would come in the mail the following week, so I proceeded with the painting. They had bought other works before and I trusted them.

    It didn’t come. Then she said it would come the next week, then the next week, then the one after that, then the next month, then in several months, then after the new year, then in the spring.

    Then the wife said circumstances had changed and she didn’t know when she could pay for “this very expensive painting.” Meanwhile, on her facebook page she continued to post photos of her family traveling to expensive destinations.

    I made contact again. She said I could take the girls out of the painting and sell it and then refund her the entire initial downpayment. I told her that wasn’t acceptable, then she said I’d have to wait until some year when she could pay for the beautiful portrait of her darling girls, that of course she wanted. I emailed a final bill and have never heard from her again.

    It has been over seven years since the verbal agreement and downpayment. The painting remains in a closet in my studio. A friend who is a lawyer says it’s okay at this point to take the girls out of the painting and sell it without owing her anything.

    Any advice? I did a lot of very specific work on their behalf with photo shoots, numerous meetings, the many hundreds of dollars in giclee photo blowups I did for them to help them reach an agreement, not to mention my time doing it and other work put off. Do I owe them anything? Can I take the girls out of the painting and sell it without owing them their deposit?

    • I would say that you have more than earned your money up front. Also, depending on the composition, you may choose to leave the figures in and just alter them slightly so they are not recognizable as those particular children. Keep your money and sell the work. This is a good cautionary tale for those of us starting out in portraiture or commission work.

    • Clearly, you owe them nothing, including the deposit. Take the painting out, complete it and sell it. If the girls add to the painting, leave them in. If the painting is stronger without them, take them out. You are not under any obligation to these folks in any way.

    • Ellen: I’m glad you have counsel on this matter as I’d listen to your attorney. It sounds like you never received their signature on any agreement, which I know you’ll do differently in the future. But their payments were a commitment and there must be some sort of statute of limitations. (again, attorneys come in handy here)

      All: This is why, too, you charge MORE for commissions of any kind.

      Keep ALL documentation, including emails, around your agreements.

      And just as a reminder, the scenario I outlined above wasn’t for a commissioned piece, but an existing artwork.

  • As others have already said, this is a good reminder about why you always want to have something in writing that lays out your terms in a very specific way.

    For the example provided, I’d say that if you have a mailing address, you simply return the down payment. If you don’t, and assuming that you have some way to contact them, make notice that you will hold the work for another, say, 30 days. If they don’t contact you within that time, the work will go back on the market and the deposit will be forfeit. Remember that this person has prevented you from marketing this piece in the meantime, so I think keeping the deposit is justified. Of course, other variables may prevent you from doing that, so always leave room for exceptions. If you have their money but don’t have anyway of contacting them or vice-versa, well, then, you’ve both screwed up. “Hi, here’s some money. Send me something, sometime, somewhere.” ???

    In general, I think every time you initiate an agreement with a would-be patron, you want to specify…..
    1. Contact information (get their’s and give them your card)
    2. The amount of the deposit (a receipt)
    3. What the deposit is for.
    4. When delivery will take place and how.
    5. You’re basically providing a contract, so, like every good contract, you want to know what happens if things go sour. In that case…..
    a. How long can delivery be delayed?
    b. For what reasons can either party cancel?
    c. What happens if they cancel, ie, a “restocking fee”, etc.
    d. What happens if you cancel, ie, the work is destroyed before delivery, etc.
    If you put this on the receipt for the down payment, you can just also put on there that accepting the receipt is indication of acceptance of terms.

    Now, you can type up something like this, with blanks for the details of the arrangement, in any word processing program. If you you’re using some art business software to help manage your business, it may have the ability to do this for you.

    It’s bit of work up front, but in the long run, it makes life easier for everyone.

    Ron

  • My commissions always work with written statements of agreement (often with a lawyer), and the payment broken into 2 or 3 payments. I do not start work without the first check. I deposit the check but write in the memo line the balance owed. Also, and this is really important, I do not use the money until the work is done, the customer is happy and the piece is delivered. I consider the job complete with payment of the last check and then I am free to spend the money.

    • Cara: Thanks for sharing this.

      But what would you do if you had done some work and the customer didn’t like the piece or never sent another payment?

      • Receiving of the first check is the agreement between the buyer and myself for work to begin. I would not (and have never been asked) return these funds. The second check happens when the buyer and I have agreed on the work to date and to finish as agreed. The last check I receive is when the work is delivered. Contracts help with all of this.

        So, at each stage, I receive payment when my collector has approved the work. Sometimes a buyer will want small changes done, and I will do that. Coming to agreement is how I am paid. Also, I want my collectors to feel they are part of the project. I sometimes have them “work the clay” and leave their fingerprints somewhere on the finished piece. This helps them to have an appreciation for the work and process. We are all proud of something we have had a part in.

        Just as a current example, I am awaiting a check to start a rather large project. I won’t start until that first check arrives. In the meantime other work calls. I also use Tad Crawford’s great book.

        On non-commissioned work, full payment up front is the only way I have ever sold anything. This won’t work for everyone, but it works for me.

  • In the scenario set out, it seems the buyer has put a deposit on an existing painting, not a commission. In this case, after making attempts to contact the buyer with no success, I would put the art back on the market. Then if the buyer comes returns, I would tell them they have $xxx credit for another painting.
    Commissions are another kettle of fish!

  • I keep the deposit & the work of art…That’s what deposits are for…I keep the work of art too because these are oddball cases, & they happen rarely, so I hold on to the work in my own private collection…The situation causes me uncertainty, so holding the work means that if 10 years later I run into that collector, I have a funny story to tell them & by the way, do you still want the piece ’cause I still have it!

    • What if you found a perfect buyer for the work, Sari? Would you still hold on to it?

      • I keep work under dispute…Work where something inappropriate snuck in from my subconscious…Work that is difficult, or possibly negative…I don’t like to have stuff on the market that could cause me loss of reputation years later…I have had perfect buyers for my work all the way along, & still said no…The widow who I might have taken advantage of, the single mother who wanted to buy my friendship, the young man who was underpaid at his tv job & wanted the glamour of something expensive-I say no…The best is that I get to keep some of my art this way…Someone not paying is really rare- so I would hang on to the piece to remind me not to get myself into that situation again…

  • I am strongly in favor of simple contracts for commissions (especially after the situation I posted about above), but there is a lot that needs to be spelled out, far more than you would think.

    Does anyone have a simple commission contract that covers the basics, including non payment, that they’d like to share?

    • Ellen: Pick up a copy of Tad Crawford’s “Legal Guide for the Visual Artist.” Every artist needs a copy of that. Lots of examples in there.

      • I have the book and its companion CD with contracts that you can personalize to fit your situation, but when I have used these contracts, even with legalese toned down, it has put people and government bodies of people off. Somehow the contracts seem to say, “This artist is treating art like a business!” and “she actually expects to get paid in a timely manner,” which appears to be a sin in the eyes of some. They’re more in love with the idea of a starving artist.

        So, how do you present the idea of a contract without turning customers off?

        • Ellen: You SHOULD BE treating your art like a business if you’re trying to make money! How other people respond to this is about them, not about you. And you can’t run your life or your business based on their hangups.

          I think you can do an agreement in super a super simple 1-page form. Call it a Letter of Agreement, not a contract. It is to preserve your relationships.

          • I had one commission customer who actually requested a contract and it worked out well except that I didn’t spell enough out about their last payment, which they delayed two months. I’ll work on this again, maybe with 6-point type to include all the necessary stipulations!

            I did commissions for years with no contracts, but this is a different world from 20 or 30 years ago, and I’m dealing in thousands of dollars rather than hundreds. This is my sole means of income, so it is vital to be paid for the work I do. Thank you, Alison.

  • They might be embarrassed that they can no longer afford it, they died, they moved and forgot about it, they might be in prison, or even in a mental institution.

    I think the best solution is to send them a businesslike yet heartfelt letter by certified letter explaining your situation/dilemma (put the painting back up for sale) then include a gift certificate or credit voucher valid toward another purchase. That way, you have a clear conscious and if they are released from the mental institution and decide they still want a painting from you it is a win win situation. You can even put an expiration on the thing and they may never use it.

    Obviously this is a learning experience, and you will most likely have some sort of disclaimer or agreement drawn up in the future.No biggie – has happened to me in one way or another.

  • I agree with all the above comments.. I now put something in my agreements (especially for commissions) that the initial deposit is non refundable if the buyer backs out. This separates the serious buyers from the not so serious. For the woman who did a great deal of specific photo work and other preliminaries, including starting the painting, you clearly owe them nothing. Feel free to paint out the girls and sell the painting.

    I should also say that in the case of selling an existing painting on time payments, that the painting doesn’t leave the studio until it is completely paid for. (Except in VERY special circumstances.) In my early days of my art career, I got burned several times when I let the painting out before it was completely paid for, including once through a gallery. (Actually, that time, the painting didn’t go out, but it was tied up for more than a year with no compensation to me.) So now I believe that we must write up a simple agreement where they agree that they forfeit the deposit (with us keeping possession of the painting) if they do not follow through in buying the painting, to compensate for the painting being off the market.

    • There also need to be time limits set on payments – and delivery times set for the artist, to protect both parties. There need to be accommodations for if one or the other dies, too. I have a very lengthy contract from a book about art contracts, but it scares people off. Maybe I need to write my own with no legalese but based on it. It covers all the basics.

  • I seldom do commission work, but my terms right from the start are:
    * 1/2 payable up front
    * if they don’t like the work in the end (and we can’t agree on reasonable minor changes), they don’t have to buy it, but they forfeit their deposit (that is for my trouble and supplies)
    * I am then free to do with the painting as I please, ie change it, sell it, etc.

    If they were procrastinating on final payment, I would give them notice that they have 30 days to pay the final amount, or else they are deemed to have refused the final product and are therefore forfeiting their deposit and the painting.

    Now that I think about it, I see that more could be included such as how to deal with requests for change (free or additional charge?) and a deadline for payment once the work is finished.

  • Um oh I forgot…There is another spin I have used, though it won’t be popular with most…I let them have the piece, with some money down…They cannot or don’t come up with the rest of the payment…I write it off mentally as either my charity for the year or as a business loss…I have had truly honest people who love my work but really can’t afford to pay for it, even though they thought they might be able to…I forgive the debt & move on…Not a popular decision with most people but it is an option…Sometimes later they will give me a gift or something from their field…I got a bag of freshly picked peaches & cream corn…Some homemade Christmas desserts…Aveda hair care products…I’m fine with that…

  • I have very little experience here but am very interested in all of the responses.

    Sari, I think your solution is very kind. Possibly not viable for everyone, but very sweet of you.

  • Why would any professional artist put themselves in this ridiculous position in the first place?

    Just do not start to paint without a works order & contract in place.

    The deposit is NOT refundable. The balance is due on completion and without it it the art remains in the studio.[the disposal clock is started!] I send just one reminder after 28 days.

    Then that artwork is ‘stored’ in the studio for six months. Then it is sold to any buyer or disposed of via trade contacts/favourite charity auction etc.

    • A lot of us don’t begin our careers with a lot of business experience and unfortunately have to learn the hard way. I’m glad that there are people around who already know the ropes and are wiling to share their knowledge with us.

    • Phil: Perhaps you didn’t intend your opening question the way it sounds, but I don’t think it’s fair to use such a harsh assessment. Maybe you didn’t have to learn some lessons the hard way, but most artists (not just artists, but most business owners as well) do. I must stand up for artists who have found themselves in this situation and are earnestly trying to learn from it.

      I appreciate your willingness to share your terms. Do you have them sign a written agreement? Did you write the agreement up yourself or find it as a resource somewhere that we can also look it up?

      • I have emailed a document to you Alyson.

        I come from a very technical background and run a small business before. Then I had a six year go at being an artist and an art studio owner. So being blunt about why is second nature to me. I apologise unreservedly if I have caused offence too.

        As an example of a legal contract free template source follow this link it will give an idea http://www.lawdepot.co.uk

  • My experience with almost exactly this situation and another with a layaway I was too trusting over taught me the value of clear invoices and simple contracts. In the first case the client had paid for one and commissioned another to go with it. After a year and many reminders I gave her a credit which I’ve reminded her about but she’s not used. She’s absentminded and I really do think she forgot. I’ve got a policy in place now that puts a time limit on all of the above.

  • I think the answer depends on how long the artist has been trying to contact the buyer, but if we’re talking years, then yes, I would put the art back on the market.

    If it’s been less than a year, I would wait a bit longer.

    Be prepared to give a refund if the buyer eventually gets back in touch.

    And like others have pointed out, don’t make an agreement for a sale without something in writing, no matter how simple the terms might be.

    • Nat: I think we all agree that this is best practice: “And like others have pointed out, don’t make an agreement for a sale without something in writing, no matter how simple the terms might be.”

      GET IT IN WRITING!

      I would add “and no matter how much you like or trust the person and regardless of whether or not you’re related.”

  • Really interesting to hear so many views on this. I wonder if ‘lay-away’ terms in stores would provide insight, though obviously different businesses. Yes, there would be an agreement in place, but do stores keep merchandise indefinitely or refund deposits?

    • Interesting analogy, Virginia. And there are state laws about this kind of stuff that we need to be aware of. If you’re agreement says “you will forfeit the artwork after 6 months” and state laws say “1 year,” your piece of paper doesn’t mean much.

      I also know that in Colorado (and I think nationally), it’s illegal to put an expiration date on a gift card. I don’t know about gift certificates.

      Bottom line: Know what you’re getting into here. If you’re going to accept payment plans, research what the law is.

  • Thanks to everyone here. Some of these scenarios I have not (yet) encountered and so would not expect them.

    These posts have made be realize that it has been a luxury working with: a)lawyers, b)contracts, and c)corporations as collectors. There are other pitfalls I have had to watch for, but non-payment has not been one.

  • I have had commissioned pieces mostly with people not responding afterwards, or cancelling their order after they have had time to think about it. Mostly they have gone home, told their significant other they ordered artwork, and the husband has thrown a fit. After that they are too embarrassed to talk to me about it, so they end up not paying or following up. This makes me leery of taking commissions ever again.

  • Put the piece back on the market. Next time have them sign a purchase intent statement spelling out the time frame for work completion and final payment.

  • Alyson brings up an interesting point. I’ve been doing research while in the process of putting together some course materials on the basics of the art business, and there is a fairly wide spectrum of laws, some of which are national, and some of which vary state by state, that artists and their businesses may fall under. I originally thought that I could approach this by saying, “ok, for topic “A”, here’s what Alabama does, here’s what Alaska does, and so on, but that quickly became unwieldy from a presentation perspective as well as a “keeping it up to date” perspective. What I’ve instead decided to provide is a state list, with links to the various regulatory agencies that have rules and laws that would apply to artists. Artists will be able to find what they need and it will be as up to date as the states make it.

    I’m not commenting on this as a way to say “buy my stuff” (it’s not ready yet, anyway :-)), but more to say that if you do most of your work in a particular state, or in a few states, everyone could, with a bit of work, put together their own set of links to keep track of what they need know. There are “business practices”, which largely don’t change based on laws, and there are “business rules”, that do vary by local law. An artist running a business needs to layer local law on top of best business practices.

    So, what you “should” do in the example cited based on best business practices needs to be tempered by what you “can” do based on local law. Certainly, there is the “bookkeeping” side of the business, which will give you a perspective based on what’s best for you bottom line, but there’s also the “public relations” side of the business, which may lead you to do things that might not, on the surface, look like it’s the best thing for your bottom line. Every business, whether they be artists, banks, or manufacturers, all have to deal with the balance of bottom line vs public perception.

  • Phil Kendall has generously offered to share the agreement he has used for commissions. Before downloading, please note Phil’s disclaimer:

    “it is written using UK law…it is to be regarded as a specimen only! There are online template contract/legal document sites to be found. Remember to run it past your legal advisor…before using!”

    Here is the link (Word .docx file):
    http://artbizcoach.com/amagifts/kendall-phil-commissions.docx