How Can We Help?
< All Topics
Print

Long Term of Loan of Works – Fee & Conditions

UpdatedJuly 11, 2025

Calculating a loan fee for artworks typically involves several factors to ensure fair compensation for the lender while considering industry standards. Here’s a structured approach:

1. Determine the Artwork’s Value

  • Look at recent sales of similar works as a reference OR look at value of the work based on your current sales price.
  • Museums and galleries often consider the fair market value or insurance value.

2. Establish a Loan Fee Percentage

  • Loan fees are usually based on a percentage of the artwork’s value.
  • A common range is 1% to 5% of the artwork’s value per loan period (typically per month or per year).

3. Consider Additional Factors

  • Loan Duration: Longer loan periods may have discounted rates.
  • Exhibition Type: High-profile exhibitions may warrant higher fees.
  • Borrower Type: Non-profits and educational institutions might negotiate lower rates.
  • Location & Risk: Higher risk or international loans may justify higher fees.

Once you have made the calculation, look at it and assess how this fits in terms of your expected income for the year. Does it need to be a bit higher to make it worthwhile, or lower to take into account specific circumstances.

4. Include Additional Costs

  • Insurance: Often covered by the borrower but should be factored into the agreement.
  • Shipping & Handling: Packing, transport, and installation should be accounted for.
  • Conservation & Maintenance: If special care is required, additional fees may apply.

5. Draft a Loan Agreement

  • Clearly outline loan fees, responsibilities, and terms.
  • Ensure it aligns with museum/gallery industry standards and legal requirements.

ARTWORK LOAN AGREEMENT – SAMPLE

Please note that this is just a sample, and you should seek legal advice on any agreement that you put in place.

This Artwork Loan Agreement (“Agreement”) is made and entered into on this [Date] by and between:

Lender: [Lender’s Name]
Address: [Lender’s Address]
Email: [Lender’s Email]
Phone: [Lender’s Phone Number]

AND

Borrower: [Borrower’s Name]
Address: [Borrower’s Address]
Email: [Borrower’s Email]
Phone: [Borrower’s Phone Number]

1. Artwork Description

The following artwork(s) is/are being loaned:

  • Title: [Title of Artwork]
  • Artist: [Artist’s Name]
  • Medium: [Painting/Sculpture/Digital, etc.]
  • Dimensions: [Size]
  • Current Value: [€ Value]
  • Condition Report Attached: [Yes/No]
  • Photograph Attached: [Yes/No]

2. Loan Period

  • Start Date: [Start Date]
  • End Date: [End Date]
  • Return Date: [Return Deadline]
  • If an extension is required, the Borrower must request it in writing at least [X] days before the end of the loan period.

3. Loan Fee and Payment Terms

  • The Borrower agrees to pay a loan fee of [X]% of the artwork’s appraised value per [Month/Year].
  • The total loan fee for the agreed period is [€ Amount].
  • Payment shall be made [Upon Signing/Monthly/Annually] via Standing Order to
    Account Details:
    .
  • Late payments will incur a penalty of [X]% per [week/month].

4. Insurance

  • The Borrower shall insure the artwork for its full appraised value under an all-risk fine art insurance policy.
  • Proof of insurance must be provided before the loan commencement.
  • If the Borrower fails to provide adequate insurance, the Lender reserves the right to terminate the agreement.

5. Transport, Handling, and Installation

  • The Borrower is responsible for packing, shipping, installation, and label text costs.
  • Artwork must be transported by a professional fine art handler.
  • The Borrower must ensure proper security and environmental conditions during transport and display.
  • The artwork must be installed following industry best practices, including appropriate lighting, mounting, and protective barriers if necessary.
  • All display labels and accompanying texts must be approved by the Lender prior to installation.

6. Display, Security, and Care

  • The Borrower shall display the artwork in a secure, controlled environment suitable for its preservation.
  • No alterations, restorations, or repairs may be conducted without the Lender’s written consent.
  • The Borrower shall ensure the artwork is not exposed to direct sunlight, extreme temperatures, or high humidity.
  • Security measures, including CCTV or on-site monitoring, must be in place if required by the Lender.

7. Condition Reports and Inspections

  • A condition report must be completed upon receipt and return of the artwork.
  • The Lender reserves the right to inspect the artwork during the loan period with reasonable notice.

8. Protection Against Reputational Damage

  • The Borrower agrees not to use the artwork in any manner that could cause reputational harm to the Lender or the Artist.
  • The artwork shall not be exhibited in a context that misrepresents its historical, cultural, or artistic significance.
  • Any marketing, promotional, or educational materials referencing the artwork must be approved by the Lender.

9. Resulting Sales Policy

  • Sales Opportunity
    • If the loaned artwork is offered for sale during the loan period, the Lender must notify the Borrower.
    • The Borrower may have the first right of refusal to purchase the artwork at an agreed price.
  • Sales Commission (If Applicable)
    • If the Borrower facilitates a sale to a third party, the Borrower is not entitled to a commission of the final sale price unless otherwise agreed.
    • If necessary, the commission percentage and payment terms must be documented in writing under separate agreement.
  • Pricing and Agreement
    • The artwork’s sale price must be pre-agreed upon in writing by the Lender.
    • No sale may occur without the Lender’s explicit consent.
  • Payment Terms
    • Payment for the sale of the artwork shall be made directly to the Lender unless otherwise agreed.
  • End of Loan Sale Rights
    • If the artwork is sold after the loan period but as a result of the Borrower’s efforts, the Borrower may still be entitled to a commission if agreed in writing before the end of the loan.
  • Legal Compliance
    • Any sale must comply with the applicable jurisdiction’s tax, export, and resale laws.
    • If applicable, resale royalty rights (Droit de Suite) must be observed.

10. Termination and Return

  • Either party may terminate this agreement with [X] days’ written notice.
  • The Borrower must return the artwork in the same condition as received.
  • Late returns may result in additional fees of [€X per day/week].
  • If damage is identified upon return, the Borrower is responsible for restoration costs.

11. Indemnification and Liability

  • The Borrower agrees to indemnify the Lender against any loss, damage, or claim arising from the loan of the artwork.
  • The Lender is not liable for any damage or loss occurring after the artwork has been handed over to the Borrower.

12. Governing Law and Dispute Resolution

  • This Agreement shall be governed by the laws of [Applicable Jurisdiction].
  • Any disputes arising from this agreement shall be resolved through [mediation/arbitration/court proceedings] in [Jurisdiction].

13. Amendments and Entire Agreement

  • Any modifications to this Agreement must be made in writing and signed by both parties.
  • This Agreement represents the entire understanding between the parties and supersedes any previous agreements.

13. Signatures

By signing below, both parties agree to the terms and conditions outlined in this Agreement.

Lender’s Signature: ______________________
Date: ________________

Borrower’s Signature: ______________________
Date: ________________

Table of Contents