A Consignment Agreement is a legally binding document between a consignor who wishes to sell goods and a consignee who will sell goods. It sets forth the specific arrangement between the parties including the location where goods will be sold, the payments, and the consignee's commission.
A consignment agreement allows a consignee to sell items on behalf of a consignor without having to buy them. From the sale of the items, the consignor receives a commission. By consigning goods, outlets can sell the items without investing in their purchase. Since they do not have to purchase the goods to advertise and sell them, consignment stores can provide marketing and sale of these goods without risking too much.
There are two types of consignment agreements:
- Exclusive – Under an exclusive consignment agreement, the consignor does not have the right to sell the item.
- Non-Exclusive – Under a non-exclusive consignment agreement, multiple consignors are allowed to sell the same item.
A Consignment Agreement Template usually includes the following key components:
- Parties – Identify the consignor and consignee with their names and addresses.
- Goods for Sale – Describe or identify the goods.
- Pricing – State the sale price. Consignors have the option of allowing the consignee to lower the price of an item with their approval.
- Payment – The consignee must pay the consignor the balance due after collecting payment from the buyer and after deducting the consignee’s fees or commission. The contract should state the date when the consignee must pay the consignor.
- Expenses – State in detail what expenses, if any, the consignee will be responsible for.
- Record-Keeping – The consignee must keep all records pertaining to the consignment.
- Ownership – In most cases, the consignor owns the property and the consignee is responsible for its care and for any loss or damage to the item while it is in his or her possession.
- Insurance – Usually, the consignor must have insurance that covers the consigned item.
- Termination – The contract is considered void if the item does not sell by a specific date, the consignor dies, the consignee leaves the area, or the consignee goes bankrupt.
Using PDFRun, you can electronically fill out and download a PDF copy of a Consignment Agreement Form in minutes. Fill it out by following the instructions below.
Date of the Agreement
Enter the date the agreement was made following the format: Day, Month, Year.
Name of the Consignor
Enter the full name of the consignor.
Company Name of the Consignor
Enter the company name where the consignor works.
Name of the Consignee
Enter the name of the consignee.
Company Name of the Consignee
Enter the company name where the consignee works.
Consignment of Goods
This section states that the consignor shall deliver the consigned goods for consignment to the consignee’s premises. Upon delivery, the consignee shall accept delivery of the consigned goods. The consigned goods shall remain the sole property of the consignor until sold. The consignee hereby acknowledges that it takes possession of the consigned goods only on a consignment basis and it does not acquire any property right or security interest in such consigned goods. The consignor’s consignment is not a consignment intended as security.
This section states that the title to and the property of the consigned goods shall remain with the consignor until such time as the consigned goods are purchased.
This section states that the consignee at its own cost and expense agrees to keep and display the consigned goods on the following premises: Enter the premises. The consignee shall store the consigned goods at its premises so as to be at all times segregated from all of the other inventory and shall clearly indicate that the consigned goods are the property of the supplier. Upon any demand by the consignor, the consignee will be responsible to return the consigned goods in good order and condition.
Sale of the Consigned Goods
This section states that the consignee agrees to use its best efforts to sell the goods on behalf of the consignor on such terms, and at such prices as shall from time to time be designated by the consignor.
This section states that the consignee agrees, upon sale, to receive the sale proceeds due to the consignor and to deliver the sale proceeds, after deducting all commission, to the consignor together with an accounting within (enter the number of days) days of the said sale.
This section states that the consignee agrees to accept as full payment a commission equal to (enter the percentage) of the gross sales price exclusive of any sales tax.
This section states that the consignee agrees to permit the consignor to enter the premises at reasonable times to examine and inspect the goods. The consignor or any of its representatives may come once in a month to take an inventory of the consigned goods in order to determine the goods, which have been used, damaged, destroyed, or otherwise removed from the premises.
This section states that this agreement shall commence on the (enter the date following the format: Day, Month, Year) and continue for a period of twelve (12) months, with the option to extend for an additional twelve (12) months period upon mutual acceptance.
This section states that the consignee is, and shall remain, an independent contractor selling to third-party buyers the consigned goods. The company does not appoint the consignee as its agent or authorize the consignee to hold itself out as its agent, and does not convey to the consignee any property interest in the company’s corporate name, trademarks, or goods.
This section states that the consignor shall not assign any of their rights under this agreement, or delegate the performance of any of the obligations or duties hereunder, without the prior consent of the consignee and any attempt by the consignor to so assign, transfer, or subcontract any rights, duties, or obligations arising hereunder shall be void and of no effect.
This section states that any notices, bills, invoices, or reports required by this agreement shall be deemed received on:
- The day of delivery, if delivered by hand during the receiving party’s regular business hours or by facsimile before or during the receiving party’s regular business hours.
- On the second business day following the deposit in the United States mail, postage prepaid, to the address heretofore below, or to such other addresses as the parties may, from time to time, designate in writing pursuant to the provisions of this section.
Enter the addresses of the consignee and the consignor in the spaces provided.
This section states that this agreement is to be construed in accordance with and governed by the internal laws of the State of (select from the drop-down list), USA.
This section states that all disputes under this agreement shall be settled by arbitration in (select the state from the drop-down list) before a single arbitrator pursuant to the commercial law rules of the American Arbitration Association.
Arbitration may be commenced at any time by any party hereto giving written notice to the other party to a dispute that such dispute has been referred to arbitration. Any award rendered by the arbitrator shall be conclusive and binding upon the parties hereto.
This provision for arbitration shall be specifically enforceable by the parties and the decision of the arbitrator in accordance herewith shall be final and binding without the right of appeal.
This section states that if any provision of this agreement shall be held to be illegal, invalid, or unenforceable under present or future laws, such provisions shall be fully severable. This agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of this agreement; and the remaining provisions of this agreement shall remain in full force and effect.
Limitation of Liability
This section states that in no event shall either party be liable to the other party for any indirect, incidental, consequential, special, or exemplary damages, including without limitation, business interruption, loss of or unauthorized access to information, damages for loss of profits, incurred by the other party arising out of the services provided under this agreement, even if such party has been advised of the possibility of such damages.
This section also states that in no event will neither party’s liability on any claim, loss, or liability arising out of or connected with this agreement shall exceed the amounts paid to the consignor during the (enter the number of months) months period immediately preceding the event giving rise to such claim or action by the consignee.
This section states that each party shall at its own expense indemnify and hold harmless, and at the other party’s request defend such party its affiliates, subsidiaries, successors, and assign officers, directors, employees, sublicensees, and agents from and against any and all claims, losses, liabilities, damages, demand, settlements, loss, expenses and costs (including attorneys’ fees and court costs) which arise directly or indirectly out of relate to:
- Any breach of this agreement.
- The gross negligence or willful misconduct of a party’s employees or agents.
Entire Agreement; Amendment
This section states that this agreement is final, complete, and is an exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior or contemporaneous representations, discussions, proposals, negotiations, conditions, communications, and agreements, whether written or oral, between the parties relating to the subject matter hereof and all past courses of dealing or industry custom.
No modification of or amendment to this agreement shall be effective unless in writing and signed by each of the parties.
This section states that the waiver by either party of a breach of or a default under any provision of this agreement shall not be effective unless in writing and shall not be construed as a waiver of any subsequent breach of or default under the same or any provision of this agreement, nor shall any delay or omission on the part of either party to exercise or avail itself of any right or remedy that it has or may have hereunder operate as a waiver of any right or remedy.
This section states that the headings used in this agreement are for the convenience only and shall not be used to limit or construe the contents of any of the sections of this agreement.
Consignor Name and Signature
Affix the consignor’s signature over his or her printed name.
Name and Signature of Officer
Affix the consignee’s signature over his or her printed name.
What is the purpose of a consignment agreement?
A consignment agreement is a contract between two parties, in which one party agrees to sell the goods of the other party on commission. The party who owns the goods is known as the consignor, and the party who sells the goods is known as the consignee.
The consignment agreement should spell out the terms of the arrangement between the two parties, including how much commission the consignee will earn, how long the agreement will last, and what will happen if the goods are not sold.
In general, here are the key purposes of a consignment agreement:
- To protect both parties — A consignment agreement protects both the consignor and the consignee. It gives the consignor peace of mind knowing that their goods are in good hands, and it gives the consignee clarity on what is expected of them.
- To establish a working relationship — A consignment agreement can help to establish a working relationship between the two parties. Setting out the terms of the arrangement upfront can help to avoid any misunderstanding or confusion down the line.
- To clearly define roles and responsibilities — The agreement should clearly define the roles and responsibilities of each party. This will help to ensure that everyone knows what is expected of them and avoid any confusion or frustration further down the line.
- To avoid disputes — By setting out the terms of the arrangement in a clear and concise manner, a consignment agreement can help to avoid any disputes between the two parties. If there is ever any disagreement, both parties can refer back to the agreement to see who is responsible for what.
- To protect intellectual property — If the consignor is sending goods that are protected by intellectual property rights (such as copyright or trademark), it is important that these rights are mentioned in the agreement. This will ensure that the consignee does not infringe on these rights while selling the goods.
- To establish a clear pricing structure — A consignment agreement should establish a clear pricing structure for the goods being sold. This will ensure that both parties are aware of how much the goods are worth and avoid any confusion or disputes further down the line.
- To make sure goods are returned — If the agreement is for a limited time only, it is important to include a clause that states that the goods must be returned to the consignor at the end of the agreement. This will ensure that the consignor gets their goods back even if they are not sold.
These are just some of the key purposes of a consignment agreement. By including all of these points in your agreement, you can help to protect both parties and avoid any misunderstandings or disputes further down the line.
How do you make a consignment agreement?
A consignment agreement is a contract between a consignor and a consignee that sets forth the terms and conditions of the sale of goods. The agreement should include the following:
- The names and addresses of the consignor and consignee.
- A description of the goods being sold.
- The price at which the goods will be sold.
- The terms of payment, including when payment will be made and how it will be made (e.g., by check, cash, or wire transfer).
- The date on which the agreement will expire.
- The signature of both parties.
Follow these steps to write an effective consignment agreement:
- Determine the consignor and consignee. The consignor is the party who owns the goods being sold, while the consignee is the party who will be selling the goods.
- Draft a description of the goods being sold. This should include a detailed list of all items included in the sale.
- Set the price at which the goods will be sold. Be sure to include any discounts or promotions that may apply.
- Outline the terms of payment, including when payment will be due and how it will be made (e.g., by check, cash, or wire transfer).
- Include an expiration date for the agreement. This will ensure that the agreement does not remain in effect indefinitely.
- Have both parties sign the agreement. This will make the contract legally binding.
What are consignment payment terms?
Consignment payment terms are the conditions under which a consignor will be paid for the goods or services they have provided. These terms are typically agreed upon by the consignor and consignee prior to entering into a consignment agreement and may include provisions for how and when payments will be made, as well as any penalties that may be incurred for late or non-payment. Consignment payment terms can vary depending on the nature of the transaction and the relationship between the parties involved, so it is important to carefully review these terms before entering into any agreement.
What are the types of consignment?
Consignment is the process of sending goods to someone else to be sold on your behalf. Here are some types of consignment:
- General Consignment — This type of consignment is when the owner of goods places their items with a consignee, who will then sell the goods on behalf of the owner. The consignee will usually take a commission fee for their services. In general, this type of consignment is used for lower-priced items since the costs associated with consigning these items are often higher than the potential selling price.
- Specialty Consignment — Specialty consignment is similar to general consignment but is typically used for high-end or vintage items. The main difference is that specialty consignors often have more expertise and may provide additional services, such as authentication or restoration. These extra services come at a higher cost but can help increase the selling price of the item.
- Online Consignment — With the rise of online shopping, many consignment shops have moved their operations online. This allows for a wider audience and eliminates the need for a physical storefront. Online consignment is often used for lower-priced items that are easily shipped, such as clothes or small home decor items.
- Estate Consignment — Estate consignment is when someone sells the belongings of a deceased person on behalf of the estate. This can be a difficult and emotional process, so it is important to find a consignee you trust. Estate consignment is typically used for higher-priced items, such as furniture or jewelry.
- Business Consignment — Business consignment is when a company ships goods to another company to be sold on its behalf. This type of consignment is often used when companies are overstocked on certain products or are trying to clear out old inventory. Business consignment can be used for any type of product but is most common with larger items, such as machinery or vehicles.
Under each of these consignment types, there are different arrangements that can be made between the consignor and consignee. It is important to discuss these arrangements upfront so that there are no surprises later on.
The most common arrangement is known as “consignment at risk”, which means that the consignor bears all the risks associated with the sale of their goods. This includes the risk of the goods being damaged or stolen, as well as the risk of them not selling at all.
Another common arrangement is known as “firm price consignment”, which means that the consignor and consignee agree on a set price for the goods upfront. This price is typically lower than what the market value would be, but it ensures that the consignor will receive a certain amount of money regardless of whether or not the goods are sold.
There are also consignment arrangements where the consignee bears all the risks, such as “returns allowed” and “no returns accepted”. In these cases, it is important to discuss the conditions under which the goods can be returned, as well as who will pay for shipping costs.
Finally, there are also hybrid arrangements that combine elements of both consignments at risk and firm price consignment. These arrangements can be customized to fit the needs of both parties and are often used when consigning high-value items.
No matter what type of arrangement you choose, it is important to have a written agreement in place that outlines the terms of the consignment. This will protect both parties in case there are any disputes later on.
Consignment can be a great way to sell unwanted items, but it’s important to do your research beforehand. By understanding the different types of consignment and the risks involved, you can ensure that you find the best arrangement for your needs.
What does signed consignment mean?
A signed consignment is an agreement between a consignor and a consignee in which the former agrees to sell goods on behalf of the latter. Under this agreement, the consignor is responsible for delivering the goods to the consignee, and the consignee is responsible for paying the consignor for their services.
This arrangement is often used when businesses want to sell their products without having to invest in inventory or staff, as it allows them to outsource these responsibilities to someone else. The terms of a signed consignment agreement will vary depending on the parties involved, but typically, the consignor will receive a percentage of the sales price for each item sold.
Is consignment a partnership?
Consignment can be seen as a partnership between the consignor and the consignee, as both parties work together to sell the merchandise. The consignor provides the merchandise and Sets the selling price, while the consignee agrees to sell the merchandise and keeps a percentage of the sales. This arrangement can be beneficial for both parties, as it allows the consignor to reach a wider audience for their products and gives the consignee a chance to make some extra money.
Of course, there are also some risks involved in consignment arrangements. For example, if the merchandise doesn't sell, the consignor may not get their money back. And, if the merchandise is damaged or stolen while it's in the consignee's possession, the consignor may be held responsible. As such, it's important to carefully consider all of the potential risks and benefits before entering into a consignment agreement.
Who is the consignor and who is the consignee?
The consignor is the party who contracts with the carrier to move goods, while the consignee is the party who receives the goods. In some cases, the consignor and consignee may be the same person or entity. However, there are also instances where the two parties are different.
For example, a company may hire a transportation company to ship its products to customers. In this case, the company would be the consignor and the customer would be the consignee. Generally speaking, the term "consignor" is used to refer to the sender of goods, while "consignee" is used to refer to the recipient.
Is consignment a good idea?
Consignment can be a great option for people who are looking to sell their items without having to go through the hassle and expense of setting up their own business. It can also be a good option for people who are looking to buy items at a discounted price. However, there are some things to keep in mind before consigning your items. Make sure you understand the terms of the agreement and that you are comfortable with the fees associated with consignment. You should also make sure that the items you are consigning are in good condition and that you have a way to track them. Finally, be prepared to negotiate on price if necessary.
Who is the owner of goods on consignment?
The owner of the goods on consignment is the person who owns the inventory that is being consigned. This means that they are the legal owner of the merchandise and are responsible for paying any taxes or fees associated with the sale of the goods. The consignor is also responsible for ensuring that the merchandise is in good condition and meets all relevant safety and quality standards.
What are the advantages of consignment?
There are a few advantages to consignment:
- You don't have to pay for the item until it sells — This can be helpful if you're tight on cash or if you're not sure how popular the item will be.
- You can make more money off of consignment than selling outright — This is because you'll usually get a higher percentage of the sale price when selling on consignment.
- It's easier to sell items on consignment than outright — This is because the store takes care of marketing and selling the item for you. All you have to do is drop it off and collect your money once it sells.
- You have less risk when selling on consignment — This is because you don't own the item until it's sold, so you're not stuck with it if it doesn't sell.
- It's a good way to clear out the clutter — If you have items taking up space in your home that you no longer use or need, selling them on consignment is a great way to get rid of them while making some extra money.
What is the difference between a joint venture and a consignment?
There are a few key differences between joint ventures and consignments. For one, joint ventures are typically set up as long-term business relationships, while consignments are generally shorter-term arrangements. Additionally, in a joint venture, both parties share in the profits (and losses) of the venture, while in a consignment arrangement, the consignee typically only earns a commission on sales. Finally, joint ventures usually involve some level of shared ownership or control over the venture's assets, while in a consignment arrangement, the consignor typically retains full ownership of the goods being sold.
What is the difference between consignment and consignee?
The main difference between consignment and consignee is that consignment is the act of sending goods to someone else, while consignee is the person who receives the goods.
Consignment generally refers to the act of sending goods to another party, often for the purpose of selling them. The sender is known as the consignor, and the recipient is known as the consignee. The agreement between the two parties typically stipulates that the sender will retain ownership of the goods until they are sold, at which point the buyer will become the owner.
Consignees, on the other hand, are simply recipients of goods that have been sent to them. They may or may not be responsible for selling those goods, but they will take possession of them upon receipt. In some cases, consignees may be required to pay for the goods they receive, but in other cases, they may simply be responsible for holding onto them until the consignor comes to retrieve them.
Is it better to consign or sell?
There's no easy answer to this question - it depends on a variety of factors, including what you're selling, how much it's worth, and your personal circumstances. If you're not sure what to do, it's always best to seek professional advice before making a decision.
Generally speaking, consigning items is better for high-end or collectible items, while selling is often the best option for more common items. Here are some things to keep in mind when making your decision:
- You may get more money for your item if it sells through consignment, but there's no guarantee.
- It can take longer to sell an item through consignment, so you need to be patient.
- You'll likely have to pay a commission to the consignment shop if your item sells.
- You'll usually get less money for your item if you sell it outright, but you'll get the money immediately.
- It's often easier and faster to sell an item outright than to go through the consignment process.
- You won't have to pay a commission if you sell the item yourself.
Ultimately, the best option for you will depend on your individual circumstances. If you're not sure what to do, it's always best to seek professional advice before making a decision.