The Resale Royalty Right of Artists in Brazil – What Collectors and artists Must Know

What Is the Resale Right (Droit de Suite)?

The Resale Right, known globally as Droit de Suite in French is a legal, perpetual, and non-waivable right that entitles visual artists to receive a percentage of the increase in value whenever their original works of art are resold in the market. The resale right is applicable to every subsequent sale of the artwork occurring after the first transaction executed by the artist. Resale is every act of repeated sale carried out by private sellers or intermediaries dealing with artworks.

This right applies in Brazil under Article 38 of Law No. 9.610/1998 and is similarly protected in the European Union under the Directive 2001/84/EC.

Who is beneficiary of the “Droit de Suite”?

The royalties are owed by the artist of the artwork (or their heirs) if two conditions are fulfilled:

1. The artist is alive or dead for less than 70 years;
2. The artist has habitual residence in Brazil, Europe or any country where the “droit de suite” is a legal right.

Key Facts for Collectors and Buyers

• The resale right applies only to original works of art, including paintings, drawings, sculptures, photographs, engravings, and manuscripts.
• It is triggered in every resale transaction in Brazil, whether conducted privately, through galleries, dealers, or auction houses, if there is an increase in price.
• The artist (or their heirs) is entitled to 5% of the capital gain resulting from the resale of the work.

Can the Resale Right Be Waived or Contractually Excluded?

Absolutely not. The resale right is defined in Brazilian and European law as an inalienable and non-waivable right, meaning:

• It cannot be contracted out, waived, or renounced, not even in advance.
• Every buyer, including future buyers, automatically assumes the legal obligation to comply with this right whenever a resale occurs.

Who Is Responsible for Payment?

• The reseller is legally responsible.
• If an auctioneer, dealer, or gallery intermediates the transaction, they may act as the depositary of the royalty.
• In private sales, the seller retains full responsibility until the artist receives the royalty.

How Is It Calculated?

• In Brazil:
  • 5% of the capital gain between the previous purchase price (adjusted from inflation) and the resale price.
  • If the original purchase price is undocumented, Brazilian practice assumes 50% of the resale price as profit, and 5% applies to that.
• In the European Union under the Directive 2001/84/EC (Art. 20): “It is appropriate to calculate the royalty as a percentage of the sale price and not of the increase in value of works whose original value has increased.” (resellers must apply applicable law in the country where the artwork is sold and contact the artist).

Does the Platform Contract Override This Right?

No. The purchase contract on Esrac.Art does not create or eliminate the resale right.

However, the platform Esrac.Art contract will:

• Inform all parties about the existence and enforceability of the resale right.
• Obligate buyers to pass this right on to future buyers.
• Require sellers to notify Esrac.Art and the artist of any future resale.
• Facilitate royalty payment, ensuring compliance.

Applicability

• The Resale Royalty Right (Droit de Suite) is due by the reseller to the artist because of applicable law in all countries where it is enforceable.
• In countries where the Resale Royalty Right (Droit de Suite) is not a legal obligation, like in the US, it shall be documented in the purchase contract of the initial sale (primary contract).

Practical Clauses Esrac.Art Adopts in the purchase contract

• Resale Right Declaration: “This artwork is subject to the Brazilian Resale Right Law (Law 9.610/1998, Art. 38) for resales occurring within Brazil. Buyer acknowledges the obligation to comply with this right in any future resale in Brazil or abroad. The resale right royalty shall be calculated according to existing local law, if any, or as 5% of the capital gain between the previous purchase price (adjusted from inflation) and the resale price in countries where the resale right is not defined as a legal obligation..”
• Binding on Successors: “The obligations under this clause are binding upon the buyer, their heirs, legal successors, assigns, and any future purchasers.”
• Notification Obligation: “The buyer agrees to notify the artist and/or Esrac.Art of any resale transaction within 30 days of its completion. To ensure the artwork’s updated provenance and upon proof of the seller’s fulfillment of the Resale Royalty Right to the artist, the buyer is encouraged to request the artist (or their authorized representative) to issue a new Certificate of Authenticity in the name of the new owner.”
• Liability Clause: “Failure to comply with the resale royalty obligation constitutes a breach of contract and subjects the seller to indemnification for damages, including the unpaid royalty plus applicable legal costs.”

Does This Apply Internationally?

The resale right applies legally in numerous countries, not only within Brazilian and European jurisdictions. In European countries resale right percentages vary. In countries without such law (e.g., USA), no legal royalty applies, unless voluntarily enforced by the artist via a purchase contract on the primary market (first sale).

Conclusion

The resale right is:

1. A legal obligation in numerous countries (Brazil, Europe…);
2. An ethical obligation of the reseller;
3. A way to maintain history of all transactions; and
4. A recognition of the enduring contribution of artists to the cultural and economic value of their creations.

By purchasing from Esrac.Art, buyers join a responsible and transparent art ecosystem where artists continue to benefit from the appreciation of their works.

For any questions regarding this matter or to declare a resale, please contact César Ramos (dm@esrac.art.br)

Author: César Ramos (Esrac)