Retail Businesscustom

Consignment Agreement

For selling goods on consignment - covers pricing, commission splits, and unsold inventory handling.

What's included

Consignment Relationship and Goods

Identifies the consignor, consignee, and consigned goods, and confirms that the arrangement is a consignment rather than an outright sale.

Title, Delivery, and Inventory Records

States that title remains with the consignor until sale and requires accurate inventory tracking, delivery confirmation, and sales records.

Commission Percentage and Payment Schedule

Sets the consignee commission, timing of remittances, permitted deductions, reporting obligations, and consequences for late payment.

Pricing Authority and Markdown Permissions

Defines who controls pricing, whether discounts are allowed, and whether markdowns require prior written approval from the consignor.

Risk of Loss, Damage, and Insurance

Allocates responsibility for loss, theft, shrinkage, damage, and insurance coverage while goods are in the consignee's possession.

Confidentiality and Business Information

Protects nonpublic pricing, customer, supplier, product, and sales information disclosed during the consignment relationship.

Termination and Return of Unsold Goods

Allows termination by notice, addresses final accounting, and establishes procedures and deadlines for returning unsold inventory.

Dispute Resolution and Governing Law

Specifies governing law, venue, escalation procedures, and available remedies for disputes arising from the agreement.

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Frequently asked questions

What is a consignment agreement?

A consignment agreement is a contract where the owner of goods provides them to a retailer or seller to sell on the owner's behalf, while ownership typically remains with the owner until the goods are sold.

What payment terms should a consignment agreement include?

It should state the consignee's commission percentage, when sales proceeds are paid to the consignor, what deductions are permitted, and what sales or inventory reports must be provided.

Who is responsible if consigned goods are damaged or stolen?

The agreement should allocate risk of loss, theft, shrinkage, or damage while the goods are in the consignee's possession and may require the consignee to maintain appropriate insurance.

What happens to unsold goods at the end of the consignment term?

The contract should specify whether unsold goods are returned, held for continued sale, discounted, purchased by the consignee, or otherwise handled by mutual written agreement.

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Templates/Consignment Agreement