Effectiveness Of Art Loan Agreement

Nowadays, art loan exhibitions have been increasingly frequent in mainlandChina, which proves to be considerable activities for the art market and even thedevelopment of the whole cultural reform. However, due to the misunderstanding ofthe nature of art loan agreement, someone takes it for art commodatum whilesomeone takes it for art loan. This paper aims to define art loan agreement anddetermine the nature from different points of view (commodatum or loan; unilateral orbilateral), correspondingly differ these two forms with general ideas of commodatumand loan to find special rules. Through sorting out related overseas laws and customs，the author will discover the inadequacy of legislation in China in order to propose tolegislation related to the art market and advocate a comprehensive agreement to avoidthe legal risk before that is improved.This paper is divided into three chapters.Chapter one includes the significance of art loan exhibitions and its legal nature.This chapter starts from the rise of art loan exhibitions at home and abroad. The microsense of art loan is to reduce the regional prejudice through increasing individualartistic experience and to rich personal life by the aesthetic and intellectualstimulation; while the macro sense of art loan is that the art, as an “ambassador”,arouses the interest, understanding and enthusiasm for the visitors to develop theircultural horizon, to initiative new creation and to promote academic researches. Then,this chapter researches on the legal nature of art loan at home and abroad. Chapter two is on the content of art loan agreement in order to reveal the rightsand obligations for both parties. Art loan agreements are divided into two partsaccording to its free nature or not (commodatum or loan in continental law).According to the rights and obligations, differentiate the nature of comodatum andloan. Firstly, exchange of interests or not. The former lender transfers his possessionand exhibition rights of the work of art without consideration payment, while thelatter lender has a consideration payment for lending the object. Secondly, takingdifferent liabilities. The lender takes the liability of major fault or willful damage incommodatum, while a liability of fault in loan, which means the former lender onlycompensates at major faults or willful damage, but the latter lender has to compensateonce he has a fault. Thirdly, taking different terms of duration. There is a legal longestduration of20years in loan, but no certain regulation in commodatum. Though,generally term of commodatum is short, the lender is entitled to withdraw the objectwhenever he needs at all times. Fourthly, taking different liabilities for warrantyagainst defects. The former lender has less liability, which means the owner does notneed to repair the object when it’s broken; while the latter one take this liability toensure the object in active condition according to the agreement or object nature.Fifthly, there are two special regulations of “sales not devastating lease tenant” in loanbut not commodatum.Furthermore, this paper finds out the special regulations in art loan behaviordiffering from commodatum and loan. Art loan agreement, due to its historical,cultural, social and high valuable subject matter, has to be applied to certain specialregulations. The special regulations of art commodatum are as follows: firstly, theborrower shall take the burden of insurance; secondly, the art commodato is aconsensual contract instead of a real contact; thirdly, no matter where the place ofdelivery is, the lender is entitled to require a borrower bear the security cost of theobject; fourthly, the lender is entitled to terminate contract before the date ofexpiration in special circumstances. The special regulation of art loan is that: firstly,the principle of “sales not devastating lease tenant” shall not be applied; secondly, thelender shall not dispose the object during a loan. There are two special regulations both in art commodatum and art loan. The lender has the right to supervise, dominateand learn about the use of the object and the right to learn about the storage andexhibition state at all times. Eight special regulations as mentioned above differentiateart loan from general commodatum and loan.Chapter three focuses on three defects of our legislation. The first problem isabout the detention of exhibits. Through sort out the judicial seizure legislative statusof United Nations and the judicial anti-seizure legislative status of countries and areassuch as the United States, Britain, France, Germany and Taiwan area. Offer proposalto domestic museums for their lending works of art to overseas institutions, comparedifferent judicial anti-seizure systems in order to provide notes for the museums inmainland China which will be involved in an international or inter-regional art loanevent. Meanwhile, suggest to establishing domestic anti-seizure system to improve artloan events and learn the preservation status of culture relic and work of art. Thesecond problem is about the term of lending. In China, term of loan is regulated notmore than20years while allowing renew after the expiry. Since we have no similarlegislation of commodatum in civil law or in contract law, if there is no termlimitation on art commodato, thus, a term of commodato might be over20years,which becomes a kind of grant. The interest balance between commodatum and grantcannot be maintained well. Thus, the author suggests to limiting the term ofcommodatum not more than20years, the same as the term of loan to make the bestuse of the objects. The third question is about terminating contract before the date ofexpiration. We have no clause of terminating loan contract before the date ofexpiration in contract law. Neither do we have the clause of commodatum in civil lawor contract law. Thus, the author advises to draw on the experience of the continentallaw for its regulation of terminating contract before the date of expiration in art loan.Finally, to the art market practitioners, it is recommended to practice acomprehensive agreement for art loan exhibition before the legislation improved. Under the pr emise of respecting the freedom of contract, this paper aims to find asolution of feed forward control for possible disputes.