Consignment Agreement

Jump to Section

Need help with a Consignment Agreement?

CREATE A FREE PROJECT POSTING
Post Project Now

What is a Consignment Agreement?

A consignment agreement is a legally binding document between a consignee and a consignor for the sale, storage, transfer, resale and use of a commodity. The consignee accepts goods from sellers to sell to potential buyers. The consignee will not receive commissions till the goods are sold. If the goods do not sell, they can be returned to the consignor.

You can read more on consignment here .

What is Consignment in Contract Law?

In contract law, consignment agreements contain language indicating that the retailer agrees to display the provided consigned items for a specific time period also known as the consignment period . The terms set out in the consignment agreement decide how the commodities will be marketed during the consignment period.

For each sale, the consignee will get commission and pay the agreed upon price to the consignor who provided the items for sale. The contract also determines how the unsold items will be returned or if the consignment period will be extended for those items.

You can read more on consignment agreements in contract law here .

Meet some lawyers on our platform

Pura R.

5 projects on CC
View Profile

Benjamin E.

4 projects on CC
View Profile

Diane D.

6 projects on CC
View Profile

Cory B.

1 project on CC
View Profile

Key Components of a Consignment Agreement

There are key components of a consignment agreement:

  • Parties Involved: The agreement should identify the parties involved and contain the date of the agreement. The party providing the commodities is known as at the consigner and the party selling the property on behalf of the consignor is called the consignee.
  • Recitals: Recitals describe the reason why the parties are entering the agreement. This can be used to describe the general retail purpose of the goods provided.
  • Consigned Goods: This section describes the goods or property being sold on behalf of the consignor by the consignee. This should be a detailed description, possibly including serial numbers, model, style, date of purchase, initial retail price, current retail price, etc.
  • Delivery of Goods: This section states that property is being provided on a consignment basis only and explains the risk that the consignor bears in delivering the product, such as loss or damage.
  • Consignment Period: This determines the initial length of the consignment and if the term will automatically extend if the good isn’t sold.
  • Efforts to Sell: This section describes the consignee’s obligations to market and sell the good and sets clear expectations that the consignor can have of the consignee.
  • Title to Products: This section emphasizes that in a consignment, the ownership of property still remains with the consignor. This is different from other relationships that occur between manufactures, retailers and stores, where the ownership shifts to the store when the good is bought to be displayed and sold in stores.
  • Payment and Commission: This section determines the percentage of sale to be kept by the consignee as commission.
  • Risk of Loss/Damage: This section reiterates the responsibility of the consignee when the property is in their possession. It also lays out the penalties in case the property is lost or damaged while under the consignee’s possession.
  • Return of Products: This section allows the consignor to request a return of the property on provision of reasonable notice. The parties can decide how long the time period would be.
  • Additional Terms: This optional section provides any additional terms that would apply to the consignment purchase and resale process.
  • Termination: The termination clause explains that either party can end the agreement at any time for any reason.
  • No Assignment: This section states that no party can transfer their responsibilities set under the contract without consent from the other parties involved.
  • Notices: This section provides addresses to which all official or legal correspondence would be delivered.
  • Default : This optional section can be used to provide security to the consignor. This indicates that if the consignor requests the consignee to file papers swearing that the products belong to the consignor the consignee must do so.
  • No Product Warranties: This section states that there are no warranties on the products except any required by law.
  • Consignor’s Representations, Warranties, and Indemnification: This is an optional section that indicates that the consignor owns the property and no other entity has interest in the property.
  • Governing Law and Equitable Relief: This governing law clause states the state and county laws that would be used to interpret the agreement.
  • Entire Agreement: The entire agreement clause simply states that the parties are signing “this agreement”. However, this doesn’t prevent a party from arguing that other enforceable promises exist.
  • No Implied Waiver: This explains that if either party breaks any obligation under the agreement it doesn’t mean that it also waives future rights to enforce any obligations.
  • Severability: The severability clause protects the terms of the agreement as a whole even if one part of other is invalidated.
  • Counterparts/Electronic Signatures: This section outlines that even if parties sign the agreement or parts of it in different locations or through electronic signatures, they will still be considered part of the same agreement.
  • Headings: This section simply clarifies that headings in the beginning of each section are meant for organization not to be considered operational parts of the agreement.

ContractsCounsel Consignment Agreement Image

Image via Pexels by Liza Summer

How Consignment Agreements Work

Consignment agreements allow a consignee to sell goods on behalf of a consignor without having to purchase the goods. The consignee earns commission on the consigned goods sold.

A consignment arrangement allows outlets to sell goods without having to invest in purchasing them. Often luxury goods are in demand in the resale market and owners of vintage luxury goods can choose to consign their luxury items.

Consignment stores provide marketing and sale of these goods without bearing much risk as they do not need to purchase the good for advertising and selling it. Consignment agreements clearly lay out responsibilities and obligations of the consignor and consignee involved in the sale of the property.

Consignment agreements can be of two types:

  1. Exclusive : In an exclusive consignment agreement, only the consignee has the right to sell the consignor’s item.
  2. Non-exclusive : In a non-exclusive consignment agreement, multiple consignees can attempt to sell the same item.

Here is more on how consignment agreements work .

Get Help with a Consignment Agreement

Do you have any questions about a consignment agreement and want to speak to an expert? Post a project today on ContractsCounsel and receive bids from business lawyers who specialize in consignment agreements.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Consignment Agreement Lawyers

ContractsCounsel verified
Partner / Attorney at Law
14 years practicing
Free Consultation

Creative, results driven business & technology executive with 24 years of experience (13+ as a business/corporate lawyer). A problem solver with a passion for business, technology, and law. I bring a thorough understanding of the intersection of the law and business needs to any endeavor, having founded multiple startups myself with successful exits. I provide professional business and legal consulting. Throughout my career I've represented a number large corporations (including some of the top Fortune 500 companies) but the vast majority of my clients these days are startups and small businesses. Having represented hundreds of successful crowdfunded startups, I'm one of the most well known attorneys for startups seeking CF funds. My engagements often include legal consultation & advisory roles, drafting of NDAs, TOS & Privacy Policies, contracts and corporate law, business strategy advice & consulting, in-house counsel, Founder & entrepreneur guidance and other roles as needed by my clients. I hold a Juris Doctor degree with a focus on Business/Corporate Law, a Master of Business Administration degree in Entrepreneurship, A Master of Education degree and dual Bachelor of Science degrees. I look forward to working with any parties that have a need for my skill sets.

ContractsCounsel verified
Managing Partner
24 years practicing
Free Consultation

Seasoned technology lawyer with 22+ years of experience working with the hottest start-ups through IPO and Fortune 50. My focus is primarily technology transactions with an emphasis on SaaS and Privacy, but I also provide GC services for more active clients.

ContractsCounsel verified
Founder
7 years practicing
Free Consultation

I am a California-barred attorney specializing in business contracting needs. My areas of expertise include contract law, corporate formation, employment law, including independent contractor compliance, regulatory compliance and licensing, and general corporate law. I truly enjoy getting to know my clients, whether they are big businesses, small start-ups looking to launch, or individuals needing legal guidance. Some of my recent projects include: -drafting business purchase and sale agreements -drafting independent contractor agreements -creating influencer agreements -creating compliance policies and procedures for businesses in highly regulated industries -drafting service contracts -advising on CA legality of hiring gig workers including effects of Prop 22 and AB5 -forming LLCs -drafting terms of service and privacy policies -reviewing employment contracts I received my JD from UCLA School of Law and have been practicing for over five years in this area. I’m an avid reader and writer and believe those skills have served me well in my practice. I also complete continuing education courses regularly to ensure I am up-to-date on best practices for my clients. I pride myself on providing useful and accurate legal advice without complex and confusing jargon. I look forward to learning about your specific needs and helping you to accomplish your goals. Please reach out to learn more about my process and see if we are a good fit!

ContractsCounsel verified
Contract and IP Attorney
4 years practicing
Free Consultation

I am a NY licensed attorney experienced in business contracts, agreements, waivers and more, corporate law, and trademark registration. My office is a sole member Law firm therefore, I Take pride in giving every client my direct attention and focus. I focus on getting the job done fast while maintaining high standards.

ContractsCounsel verified
Attorney
26 years practicing
Free Consultation

A twenty-five year attorney and certified mediator native to the Birmingham, Alabama area.

ContractsCounsel verified
Attorney/Owner
11 years practicing
Free Consultation

I absolutely love helping my clients buy their first home, sell their starters, upgrade to their next big adventure, or transition to their next phase of life. The confidence my clients have going into a transaction and through the whole process is one of the most rewarding aspects of practicing this type of law. My very first class in law school was property law, and let me tell you, this was like nothing I’d ever experienced. I remember vividly cracking open that big red book and staring at the pages not having the faintest idea what I was actually reading. Despite those initial scary moments, I grew to love property law. My obsession with real estate law was solidified when I was working in Virginia at a law firm outside DC. I ran the settlement (escrow) department and learned the ins and outs of transactions and the unique needs of the parties. My husband and I bought our first home in Virginia in 2012 and despite being an attorney, there was so much we didn’t know, especially when it came to our HOA and our mortgage. Our real estate agent was a wonderful resource for finding our home and negotiating some of the key terms, but there was something missing in the process. I’ve spent the last 10 years helping those who were in the same situation we were in better understand the process.

ContractsCounsel verified
Principal and Founder
8 years practicing
Free Consultation

Samantha has focused her career on developing and implementing customized compliance programs for SEC, CFTC, and FINRA regulated organizations. She has worked with over 100 investment advisers, alternative asset managers (private equity funds, hedge funds, real estate funds, venture capital funds, etc.), and broker-dealers, with assets under management ranging from several hundred million to several billion dollars. Samantha has held roles such as Chief Compliance Officer and Interim Chief Compliance Officer for SEC-registered investment advisory firms, “Of Counsel” for law firms, and has worked for various securities compliance consulting firms. Samantha founded Coast to Coast Compliance to make a meaningful impact on clients’ businesses overall, by enhancing or otherwise creating an exceptional and customized compliance program and cultivating a strong culture of compliance. Coast to Coast Compliance provides proactive, comprehensive, and independent compliance solutions, focusing primarily on project-based deliverables and various ongoing compliance pain points for investment advisers, broker-dealers, and other financial services firms.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call