Resale Royalty Right (Droit de Suite) Policy

Esrac.Art Resale Royalty Right (Droit de Suite) Policy


At Esrac.Art, we believe in fostering a fair and sustainable art market that respects the ongoing contribution of artists to the cultural and economic value of their creations. This policy outlines how the Resale Royalty Right, also known as Droit de Suite, is applied and managed on our platform, in compliance with applicable laws.

What is the Resale Royalty Right (Droit de Suite)?

The Resale Royalty Right 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 secondary market. This right acknowledges that artists should benefit from the growing appreciation of their work over time.

This right is protected in Brazil under Article 38 of Law No. 9.610/1998. Many other countries, including those in the European Union (under Directive 2001/84/EC), also enforce similar laws.

Key Facts for Collectors and Artists

  • Applicability: The resale royalty right applies only to original works of art, including but not limited to paintings, drawings, sculptures, photographs, engravings, and manuscripts.
  • Trigger Event: It is triggered in every resale transaction where there is an increase in price, regardless of whether the sale occurs privately, through galleries, dealers, or auction houses.
  • Beneficiary: The artist (or their heirs, if the artist has passed away) is entitled to the royalty.
  • Non-Waiver: This right cannot be waived, renounced, or contracted out by any party, even in advance. It is an automatic legal obligation for every buyer and future buyer upon resale.

Who is Responsible for Payment?

The reseller (seller of the artwork in the secondary market) is legally responsible for paying the resale royalty to the artist.

  • If an auctioneer, dealer, or gallery intermediates the transaction, they may act as the depositary of the royalty, facilitating its transfer.
  • In private sales, the seller retains full and direct responsibility for ensuring the royalty is paid to the artist.

How is the Royalty Calculated?

The method of calculation depends on the jurisdiction where the resale occurs:

  • In Brazil: The royalty is 5% of the capital gain (profit) between the previous purchase price (adjusted for inflation) and the resale price. If the original purchase price cannot be documented, Brazilian practice assumes a presumed capital gain of 50% of the resale price, with 5% applied to that presumed gain.
  • In the European Union (under Directive 2001/84/EC, Art. 20): The royalty is calculated as a percentage of the sale price (not just the increase in value). Percentages typically vary on a sliding scale. Resellers must apply the specific law of the country where the artwork is sold and directly contact the artist or their representative.

Does the Esrac.Art Contract Override This Right?

No. The purchase contract on Esrac.Art does not create or eliminate the legal Resale Royalty Right. Instead, our platform’s contract serves to:

  • Inform all parties about the existence and enforceability of the resale royalty 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 and transparency within our ecosystem.

Facilitating Compliance and Ensuring Authenticity

To further facilitate compliance with the Resale Royalty Right and provide added value to collectors and artists, Esrac.Art strongly recommends that the buyer, upon acquiring a resold artwork, requests the seller to fulfill their Droit de Suite obligation to the artist. In exchange for proof of this royalty payment, the artist (or their authorized representative) can issue a new Certificate of Authenticity in the name of the new owner. This ensures the artwork’s provenance is continuously documented, adding value and security to your collection.

Esrac.Art’s Commitment and Practical Clauses

Esrac.Art is committed to upholding the Resale Royalty Right. Our purchase contracts include the following practical clauses to ensure compliance:

  • 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 for 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.”

International Applicability

The Resale Royalty Right applies legally in numerous countries worldwide, not exclusively within Brazilian and European jurisdictions. If an artwork is resold in a country with such a law, that local law’s specific rules (including percentage rates, which vary) apply.

In countries where the Resale Royalty Right is not a legal obligation (e.g., the USA), no legal royalty applies unless it is voluntarily enforced by the artist via a purchase contract on the primary market (the first sale). Esrac.Art’s contractual clauses aim to ensure this continuity for artists globally where feasible.

Conclusion

The Resale Royalty Right is more than just a legal obligation; it is:

  • A legal and ethical obligation for resellers.
  • A crucial tool to maintain a transparent history of art transactions.
  • A fundamental recognition of the enduring contribution of artists to the cultural and economic value of their creations.

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


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

Esrac.Art | Resale Royalty Right (Droit de Suite) Policy | Version 1.1 | 22/06/2025