"Consignment Agreement Template"

What Is a Consignment Agreement?

A Consignment Agreement is a legal contract signed between a consignor (a seller) and a consignee (a distributor), upon which a consignor delivers goods to the consignment stock and stores them, and a consignee uses or sells those goods to a third party. A consignor pays a consignee a commission for their services (for selling the goods), while a consignee returns all the money received for the goods to the consignor. Most of the time a commission is presented as a percentage of the sales.

Alternate Names:

  • Agreement to Consign Goods;
  • Agreement to Sell Goods on Consignment.

Goods are the property of a consignor, if they are not sold, they are supposed to be returned to them if it is otherwise not stated in the agreement. Consignment stock is legally owned by a consignor as well, but operated by a consignee. You can download a Consignment Agreement template below or make your own using our online form builder.

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How Does a Consignment Agreement Work?

A Consignment Contract is a good choice for those businesses who would like to sell their goods through others. With this document, they can specify the terms and the procedure of merchandise distribution.

There are two types of Consignment Agreements:

  1. Exclusive Agreement. This type of agreement means that only one consignee has the right to sell a consignor's goods;
  2. Nonexclusive Agreement. In this case, several consignees can attempt to sell an item, but the commission will be received only by the one who succeeds.

When a contract is signed, a consignor delivers items to the consignment stock. A consignee starts the distribution of the delivered items. Depending on the circumstances of the agreement, a consignee regularly makes payments to the consignor for the items sold, while subtracting a commission for their services. Different situations may occur during the period of the contract, like damaged goods, unsold items, late deliveries to the consignment stock - all of these can lead to disagreements between the parties, that's why it's vital to provide a solution to most of them.

How to Write a Consignment Agreement?

The document must be formulated carefully so that there wouldn't be any place for doubts on any provision. A simple Consignment Agreement must include the following:

  1. Parties. Names and addresses of a consignor and a consignee.
  2. Merchandise. The goods for sale must be identified and described. Usually, the agreement contains a statement about the ownership of the goods.
  3. Price of the Merchandise. The document should state prices for the items depending on their condition. If a consignee is allowed to sell goods with a discount it should be included in the document, as well as if the consignee needs to get approval for a discount from a consignor;
  4. Fees, Commission, Expenses. The contract must state how often a consignee is supposed to make payments to the consignor for any goods sold. It must also indicate the amount of commission a consignee is supposed to subtract from the payments they make to the consignor. If a consignee is responsible for any other expenses it should be stated in the document as well.
  5. Delivery of the Goods. Parties should state how often the goods will be provided by the consignor, which party will bear the delivery cost, etc.
  6. Rights and Responsibilities of the Parties. It's important to thoroughly describe all rights and obligations of each side in order to avoid any disputes regarding the subject of the contract. For example, a document should include a statement that a consignee is responsible for damaging any goods in their possession.
  7. Unsold Items. A contract should include an explanation of what is supposed to be done with the items unsold, should they be returned to the consignor or should they donate them to charity, for example.
  8. Termination of the Contract. The document should provide information about when and how the contract will be terminated.
  9. Signatures.

A written and signed Consignment Agreement will help to prevent confusion and protect both parties in the case of any disputes.


Related Forms and Templates:

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Consignment Agreement
This ​ C onsignment Agreement (hereinafter referred to as the “Agreement”) is entered
into as of ___________________ by and between ____________________________,
with a mailing address of ________________________________________________
_____________________________________________________________________
(hereinafter referred to as the “Consignor”) and ______________________________
__________________________, with a mailing address of _____________________
_____________________________________________________________________
(hereinafter referred to as the “Consignee”), collectively referred to as the “Parties”,
both of whom agree to be bound by this Agreement.
WHEREAS, the Consignor owns right and title to the items described on
Exhibit A attached hereto (hereinafter referred to as the “Consigned Items”),
and the Consignee desires to take possession of the Consigned Items with the
intention of selling it to a third party.
NOW, THEREFORE, in consideration of the mutual covenants and promises
made by the parties hereto, the Consignor and the Consignee covenant and
agree as follows:
1. Right to Sell. ​ T he Consignor hereby grants the exclusive right to display and sell
the Consigned Items to the Consignee according to the terms and conditions of this
Agreement.
2. Prices and Fees. The minimum price at which the Consignee may sell the
Consigned Items shall be $___________________ (hereinafter referred to as the
“Minimum Price”). In the event the Consignee sells the Consigned Items for less than
the Minimum Price, the Consignor shall be entitled to the same payment the
Consignor would receive as its share of the sale price under this Agreement had the
Consigned Items been sold for the Minimum Price.
The Consignee shall be entitled to __________% of the full purchase price of the
Consigned Items (hereinafter referred to as the “Consignment Fee”).
Within __________ days from the sale of the Consigned Items, the Consignee shall
deliver to the Consignor the sale price of the Consigned Items sans the Consignment
Fee.
The ___________________ shall bear all expenses for shipping the Consigned Items.
Party
Consignment Agreement
This ​ C onsignment Agreement (hereinafter referred to as the “Agreement”) is entered
into as of ___________________ by and between ____________________________,
with a mailing address of ________________________________________________
_____________________________________________________________________
(hereinafter referred to as the “Consignor”) and ______________________________
__________________________, with a mailing address of _____________________
_____________________________________________________________________
(hereinafter referred to as the “Consignee”), collectively referred to as the “Parties”,
both of whom agree to be bound by this Agreement.
WHEREAS, the Consignor owns right and title to the items described on
Exhibit A attached hereto (hereinafter referred to as the “Consigned Items”),
and the Consignee desires to take possession of the Consigned Items with the
intention of selling it to a third party.
NOW, THEREFORE, in consideration of the mutual covenants and promises
made by the parties hereto, the Consignor and the Consignee covenant and
agree as follows:
1. Right to Sell. ​ T he Consignor hereby grants the exclusive right to display and sell
the Consigned Items to the Consignee according to the terms and conditions of this
Agreement.
2. Prices and Fees. The minimum price at which the Consignee may sell the
Consigned Items shall be $___________________ (hereinafter referred to as the
“Minimum Price”). In the event the Consignee sells the Consigned Items for less than
the Minimum Price, the Consignor shall be entitled to the same payment the
Consignor would receive as its share of the sale price under this Agreement had the
Consigned Items been sold for the Minimum Price.
The Consignee shall be entitled to __________% of the full purchase price of the
Consigned Items (hereinafter referred to as the “Consignment Fee”).
Within __________ days from the sale of the Consigned Items, the Consignee shall
deliver to the Consignor the sale price of the Consigned Items sans the Consignment
Fee.
The ___________________ shall bear all expenses for shipping the Consigned Items.
Party
3. Insurance. ​ T he Consignee represents and warrants that the Consignee shall
maintain insurance coverage sufficient to compensate the Consignor for the fair
market value of the Consigned Items in the event of damage due to fire, theft, or
otherwise.
4. Location of Items. ​ T he Consignee agrees and acknowledges that the Consigned
Items shall only be stored at ______________________________________________
unless otherwise agreed upon by the Parties in writing.
5. Timeframe. If all the Consigned Items are not sold by _______________________
all unsold Consigned Items shall be returned to the Consignor with all delivery costs
borne by the ___________________.
6. Representation. ​ T he Consignor hereby represents and warrants that the Consignor
holds full title (or has received, in writing, the authorization to sell the Consigned
Items by any necessary parties) to the Consigned Items.
7. Governing Law. ​ T his Agreement is governed by the laws of __________________
State
and in the event that either Party has a dispute regarding the rights and obligations
under this Agreement, any lawsuit would have to be brought in a court of competent
jurisdiction in ​ _ _________________​ in the State of ​ _ _________________​ .
County
State
8. Signatures. ​ T his Agreement may be modified by the Parties in writing. ​ T he Parties
agree to the terms and conditions set forth above as demonstrated by their signatures
as follows:
CONSIGNOR
CONSIGNEE
Name: ______________________
Name: ______________________
Signed: _____________________
Signed: _____________________
Date: ______________________
Date: ______________________
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