CHAPTER 17. RETAIL CONSIGNMENT SALES
IC 24-4-17
Chapter 17. Retail Consignment Sales
IC 24-4-17-1
Application
Sec. 1. (a) Except as provided in subsections (b) through (d), thischapter applies to an item delivered to a retail merchant after June30, 2009.
(b) This chapter does not apply to an item that has a value lessthan fifty dollars ($50).
(c) This chapter does not apply to an item offered at auction, orheld by an auctioneer before or after being offered at auction.
(d) If a provision of this chapter conflicts with the UniformCommercial Code (IC 26-1), the Uniform Commercial Code controlswith respect to that provision.
As added by P.L.85-2009, SEC.2.
IC 24-4-17-2
"Bona fide purchaser"
Sec. 2. As used in this chapter, "bona fide purchaser" means aperson who in good faith makes a purchase without notice of anyoutstanding rights of others.
As added by P.L.85-2009, SEC.2.
IC 24-4-17-3
"Claim"
Sec. 3. As used in this chapter, "claim" means a right to payment,whether or not the right is reduced to judgment, liquidated, fixed,matured, disputed, secured, legal, or equitable. The term includescosts of collection and attorney's fees only to the extent that the lawsof Indiana permit the holder of the claim to recover them in an actionagainst the obligor.
As added by P.L.85-2009, SEC.2.
IC 24-4-17-4
"Commission"
Sec. 4. As used in this chapter, "commission" means the fee thata consignor and a retail merchant have agreed that the retail merchantmay retain after the sale of the consignor's item to a third party. Theterm includes any form of compensation, including a percentage ofthe actual selling price of an item.
As added by P.L.85-2009, SEC.2.
IC 24-4-17-5
"Creditor"
Sec. 5. As used in this chapter, "creditor" means a person who hasa claim.
As added by P.L.85-2009, SEC.2.
IC 24-4-17-6 "On consignment"
Sec. 6. As used in this chapter, "on consignment" means that no:
(1) title to;
(2) estate in; or
(3) right to possession of;
an item superior to that of the consignor vests in the consignee, evenif the consignee has the authority to transfer the consignor's right,title, and interest in the work of art to a third party.
As added by P.L.85-2009, SEC.2.
IC 24-4-17-7
"Retail merchant"
Sec. 7. As used in this chapter, "retail merchant" means a retailmerchant making a retail transaction as described in IC 6-2.5-4-1.
As added by P.L.85-2009, SEC.2.
IC 24-4-17-8
Trust property; retail merchant as trustee; exceptions; liability
Sec. 8. (a) When a person delivers an item to a retail merchant forthe purpose of:
(1) sale;
(2) exhibition; or
(3) sale and exhibition;
for a commission, the delivery to and acceptance of the item by theretail merchant places the item on consignment, unless the deliveryis under an outright sale for which the person receives fullcompensation for the item upon delivery.
(b) A retail merchant described in subsection (a) is the agent ofthe person with respect to an item described in subsection (a).
(c) An item described in subsection (a) is trust property and theretail merchant is trustee for the benefit of the person until the itemis sold to a bona fide purchaser or returned to the person.
(d) Except as provided in subsection (e), this subsection does notapply to a deposit placed by a customer on an item. The proceeds ofthe sale of an item described in subsection (a) are trust property. Theretail merchant is trustee for the benefit of the person until theamount due the person from the sale is paid in full. Unless the retailmerchant and the person expressly agree otherwise in writing:
(1) a retail merchant shall pay the person the proceeds of thesale of an item not later than thirty (30) days after the retailmerchant receives the payment; and
(2) if the sale of the item is on installment, the retail merchantshall first apply funds from an installment to pay any balancedue to the person on the sale.
The terms of an express written agreement that alters a provision setforth in subdivision (1) or (2) must be clear and conspicuous.
(e) If:
(1) a customer who has placed a deposit on an item purchasesthe item; and
(2) the customer's deposit is used in whole or in part to pay for
the item;
the deposit shall be treated in accordance with subsection (d).
(f) Except as provided in subsection (g), if an item is lost ordamaged while in the possession of a retail merchant, the retailmerchant is strictly liable for the loss or damage in an amount equalto the value of the item as set forth in section 11(a)(1) of this chapter.
(g) A retail merchant is not liable for the loss of or damage to anitem in the retail merchant's possession if:
(1) the loss or damage occurs more than thirty (30) days after:
(A) the date by which the person must remove the item, asspecified in a written agreement between the retail merchantand the person; or
(B) the date on which the retail merchant sends writtennotice to the person by registered mail at the person's lastknown address that the person must remove the item, if awritten agreement described in clause (A) does not exist; and
(2) the item was in the retail merchant's possession at the timeof the loss or damage because the person failed to remove theitem.
As added by P.L.85-2009, SEC.2.
IC 24-4-17-9
Funds from sale of item on consignment as trust funds
Sec. 9. (a) If an item is trust property under section 8 of thischapter when a retail merchant initially receives it, the item remainstrust property until the balance due the consignor from the sale of theitem is paid in full, even if the retail merchant directly or indirectlypurchases the item for the retail merchant's own account.
(b) If a retail merchant resells an item described in subsection (a)to a bona fide purchaser before the consignor has been paid in full,the item ceases to be trust property and the proceeds of the resale aretrust funds in the hands of the retail merchant for the benefit of theconsignor to the extent necessary to pay any balance due theconsignor. The trusteeship of the proceeds continues until thefiduciary obligation of the retail merchant with respect to thetransaction is discharged in full.
As added by P.L.85-2009, SEC.2. Amended by P.L.1-2010, SEC.95.
IC 24-4-17-10
Trust property exempt from claims against the retail merchant
Sec. 10. Trust property under section 8 or 9 of this chapter is notsubject to a claim, lien, or security interest of a creditor of the retailmerchant.
As added by P.L.85-2009, SEC.2. Amended by P.L.1-2010, SEC.96.
IC 24-4-17-11
Conditions of accepting an item for commission on consignment;remedies
Sec. 11. (a) A retail merchant may accept an item for commissionon consignment from a person only if, not later than seven (7) days
after accepting the item, the retail merchant enters into a writtencontract with the person that specifies the following:
(1) The value of the item.
(2) The time within which the proceeds from the sale must bepaid to the consignor if the item is sold.
(3) The commission the retail merchant is to receive if the itemis sold.
(4) The minimum price for the sale of the item.
(5) Any discounts ordinarily given by the retail merchant in theregular course of business.
(b) If a retail merchant violates this section, the consignor maybring an action in a court with jurisdiction to void the consignor'scontractual obligations to the retail merchant. A retail merchant whoviolates this section is liable to the consignor in an amount equal to:
(1) fifty dollars ($50);
(2) any actual, consequential, or incidental damages sustainedby the consignor because of the violation of this section; and
(3) reasonable attorney's fees.
As added by P.L.85-2009, SEC.2. Amended by P.L.1-2010, SEC.97.