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Consignment Agreement Template

Prepared for:

‌[Client.FirstName][Client.LastName]​
‌[Client.Company]

‌Created by:

‌[Sender.FirstName][Sender.LastName]
‌[Sender.Company]
‌

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FAQ

  • A consignment agreement is a legal document that transfers ownership of a product from the consignor (or owner) to the consignee (or seller), who will then sell it. For increased exposure to the buying market, it enables a seller (manufacturer) to place products in wholesale and retail outlets.

  • A consignment transaction is designed to make it easier to deliver or transport goods. Since the capital in a consignment agreement is not tied to inventory, it serves as an incentive for wholesalers and retailers to keep goods on hand. A consignment agreement also helps boost visibility of products.

  • Make sure your consignment agreement has the names and addresses of the consignor and consignee. Also make sure it specifies products for sale (including the name the product(s) that will be sold). You will also benefit by mentioning details about costs, timetable, reimbursement, expenditure, owners, insurance, and valuation.

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Ensure that the contact information is correct to make sure that the consignment contract can be enforced efficiently.

This Consignment Agreement (the “Agreement”) states the terms and conditions that govern the contractual agreement between Consignor, located at Address (the “Consignor”) and Consignee, located at Address (the “Consignee”) who agree to be bound by this Agreement.

What is a consignment agreement? A consignment agreement is a type of contract between two parties, the consignor and the consignee, stipulating the details of the agreement for a service like a sale, resale, transport, storage or use of particular goods.

WHEREAS, the Consignor owns right and title to the items described on Exhibit A attached hereto (the “Consigned Items”), and the Consignee desires to take possession of the Consigned Items with the intention of selling it to a third party.

This consignment agreement template is for a situation where one person (the “Consignor”) would like to authorize another (the “Consignee”) to store, sell, and/or use a certain item on behalf of the Consignor. Consignment can be agreed upon over any number of items, from clothes to cars. Even real estate can be subject to a consignment contract.

NOW, THEREFORE, in consideration of the mutual covenants and promises made by the parties hereto, the Consignor and the Consignee (individually, each a “Party” and collectively, the “Parties”) covenant and agree as follows:

RIGHT TO SELL. The Consignor hereby grants to the Consignee the exclusive right to display and sell the Consigned Items according to the terms and conditions of this Agreement. The Consigned Items are as follows:

  • ‌[Item 1 and description]

  • ‌[Item 2 and description]

MINIMUM PRICE. The minimum price at which the Consignee may sell the Consigned Items shall be [Amount] (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 Amount.

Always set a minimum price in the Consignment Agreement at which the Consigned Items may be sold. This pricing gives the Consignee a baseline with which to work. This also allows the Consignee to sell the Consigned Items for less than that stated minimum, with the condition that the Consignor will still receive the minimum amount it expects in payment.

CONSIGNMENT FEE. The Consignee shall be entitled to Percentage of the full purchase price of the Consigned Items (the “Consignment Fee”).

Within [NUMBER] of days from the sale of the Consigned Items, the Consignee shall deliver to the Consignor the sale price of the Consigned Items less the Consignment Fee.

INSURANCE. The 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.

It is standard practice that the Consignor have the peace of mind that, if the items they are agreeing to grant to the Consignee are damaged or lost, the Consignor will be protected. It’s easy to adjust the contract to name the fair market value of the consigned items for added security.

‌LOCATION OF ITEMS. The Consignee agrees and acknowledges that the Consigned Items shall only be kept and stored at [Address] unless otherwise agreed upon by the Consignor in writing.

‌TIMEFRAME. In the event that all the Consigned Items are not sold by [Date], all unsold Consigned Items shall be returned to the Consignor with all delivery costs borne by the Consignee.

Even the best consignment sale will often have leftover merchandise. This clause ensures that the Consignee will return all unsold goods to the Consignor after a certain number of days. Consignment stores are less likely to include this clause, since retail stores have room to store unsold items.

CONSIGNOR REPRESENTATION. The 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.

This clause confirms that the Consignor has all rights necessary to sell the items. This protects the Consignee in case the Consignor has hidden other owners from their knowledge.

EXPENSES. The Consignee shall bear all expenses for shipping the Consigned Items.

It is generally standard that the Consignee bears the costs, but this is easily switched by simply substituting in “Consignor.”

NO MODIFICATION UNLESS IN WRITING. No modification of this Agreement shall be valid unless in writing and agreed upon by both Parties.

APPLICABLE LAW. This Agreement and the interpretation of its terms shall be governed by and construed in accordance with the laws of the State of [State] and subject to the exclusive jurisdiction of the federal and state courts located in [County], [State].

Every state has slightly different laws surrounding consignment arrangements and distribution agreements. This clause clarifies the governing law that will apply to any disagreements.

‌

IN WITNESS WHEREOF, each of the Parties has executed this Contract, both Parties by its duly authorized officer, as of the day and year set forth below.

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Consignment Agreement Template

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Use this free consignment agreement template to outline terms relating to the supply, delivery, sale, commissions, and returns policy of a consignment of goods. The template is fully customizable and includes all relevant sections, including pricing, consignment fees, insurance, applicable laws, and so on. It is suitable for use by organizations of all sizes.

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