Question

Marcella displays her artwork in local coffee shops for sale. If a painting sells, Marcella remits a 10% fee to the owner of the coffee shop; if a painting doesn't sell, Marcella takes it back to her studio. This arrangement is an example of:

A consignment arrangement.
A bill-and-hold arrangement.
A franchise arrangement.
A licensing arrangement involving symbolic intellectual property.

Answer 1

Marcella's arrangement with the coffee shops is a consignment arrangement where she retains ownership of her artwork until it sells, at which point she pays a fee to the shop owner.

Step-by-step explanation:

Marcella's arrangement with the coffee shops is an example of a consignment arrangement. In consignment, the owner of goods (or artwork, in this case) places items in the possession of another party (the coffee shop owner), but retains ownership until the goods are sold.

If the artwork sells, Marcella pays a 10% fee to the coffee shop owner, which is common in consignment deals where the seller incentivizes the consignee for providing a space to showcase the items. If a painting doesn't sell, Marcella takes it back, which is typical in a consignment agreement, as unsold items are returned to the owner rather than being bought outright by the intermediary.