Artwork in hotels – legal issues in a commercial age

It is becoming increasingly common for developers of hotels or operators of existing hotels to desire the incorporation of a piece of artwork that distinguishes the design of the hotel from other market competitors, or simply to give the hotel foyer or a particular feature room a facelift. Whether this is by way of the purchase of an existing piece of artwork from the open market place often at great expense, or by directly appointing an artist to undertake the artwork, will impact on the legal rights of the hotel developer or operator. In this article, some of the legal issues that a hotel developer or operator may encounter when appointing an artist will be explored, and also the best way that a hotel developer or operator may address these legal issues by way of contractual negotiation. It is assumed for the purposes of this article that the hotel developer or operator will be contracting with the artist subject to a sophisticated appointment or contract.

There are a number of legal issues that hotel developers or operators may encounter:

Copyright

The first hurdle that the hotel developer or operator may have to negate is the artist being concerned with in which way copyright provisions are drafted in the contract.

The best-case scenario would be for the hotel developer or operator to try and negotiate an outright assignment of the copyright of the artwork from the artist, which means that the hotel developer would have full use of the artwork's image for reasons such as marketing.

If negotiations over an outright assignment of the copyright are unsuccessful, the next option would be for the hotel developer or operator to obtain a copyright licence from the artist for purposes such as being able to take photographs for marketing, promotional and advertising material. Further, the hotel developer or operator may wish to place limits upon the use which the artist can make of the artwork for other clients of the artist, especially for other clients in the hotel industry. If this is required it will have to be discussed and agreed with the artist and set out in his/her appointment.

The artist is often concerned that the reproduced image of the artwork will be of a lesser quality than the actual image or will be altered in some way as to diminish the visual impact of the original artwork. It is common for the artist to negotiate the incorporation of contractual terms that precludes the hotel developer or operator from photographing or creating a film of the artwork without the prior written consent of the artist. The hotel developer or operator ought to resist such an amendment because it would be an inadvisable restriction on its ability to create marketing brochures or advertising material of any kind using the image of the artwork without first obtaining the permission of the artist.

If such a restriction was included it would mean that if the hotel wished to print an advertising brochure that included a photo of the artwork (even if the photo was of the foyer and the backdrop was the artwork), the artist’s permission would have to be sought. It is obviously advantageous for the hotel developer or operator to have as broad as rights as are possible for its ability to reproduce the image, however often compromises may have to be sought whereby it is agreed that the image can be reproduced for certain limited purposes.

Insurance, Title and Risk

Obviously, another important consideration is insurance cover. An artist will be expected to obtain Public Liability insurance cover for the period of time that the artist is working at the installation site (if the artwork is completed off-site, then this insurance period will be minimal).

There would be all types of practical considerations if the artist were undertaking the artwork whilst the hotel was fully operational. Likewise, there are myriad legal issues to traverse where the artwork is being completed at the same time as other construction work. If the artist is expected to complete and install the artwork on a construction site, then there will be obvious concerns about health and safety as well as the potential for the artwork to be damaged during the construction process. If the artist is simply asked to install the artwork during the construction process, then he may request that a clause pertaining to risk in the artwork being passed to the hotel developer or operator upon delivery of the artwork at the site be included in teh contract. This is a fair clause for the hotel developer or operator to allow, unless he is assured that all construction work besides from the artwork installation is to be completed by the time the artist is to be on site, and therefore these would be little risk in the artwork being damaged during the delivery and installation process.

The effect of allowing the risk in the artwork to pass to the hotel developer or operator upon delivery is that if the artwork is damaged on site then the hotel developer or operator is fully accountable. The developer or operator will be well advised to make sure that this risk is insured, possibly through his contractor.

As to title, the artist will invariably negotiate a clause that stipulates that title in the artwork is not to pass until the final instalment of the fee is paid. This provides the artist with assurance that should all the fees not be paid, then title in the artwork will not pass and the artist will retain title.

General

If the artist’s fee is to be paid by instalments, this will need to be set out in his/her appointment. The artist may seek a substantial “up front” payment, which would carry some risk to the hotel developer or operator as it is always possible that the artist may become ill or get injured and the hotel developer or operator could end up with a half-finished piece of artwork. This may actually lead to an increase in the overall value of the art (such is the speculative nature of artwork), but I would not bank on it!

Finally, a hotel developer or operator who negotiates contractually with an artist (or appoints a solicitor to act on its behalf for the same), may well find that artists are often not particularly commercially minded. This is not necessarily a bad thing as it can make an appointment more relaxed than it may otherwise have been. However, if time or money is an issue for the party appointing the artist, then provision ought to be made in the contract for these issues.