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What is a Consignment Agreement?

If you want someone to sell something on your behalf, a Consignment Agreement puts it in writing. A Consignment Agreement grants a person (known as the "consignee") the right to sell certain merchandise owned by the "consignor." A Consignment Agreement is a useful way to establish how the sale of merchandise will work.

When to use a Consignment Agreement:

  • You're in the business of selling items for others.
  • You'd like someone to sell something on your behalf.

Sample Consignment Agreement

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This (this "Agreement") is made effective as of between , of , ,  , of , ,  , and , of , ,  , of , ,  .

 

The parties agree as follows:

 

. RIGHT TO SELL.  owns (""). In accordance with this Agreement, grants  an exclusive a non-exclusive right to sell the under the terms of this Agreement. This exclusive right right to sell only applies to the following described territory:   agrees to deliver to , on consignment, the . agrees to devote best efforts to the sale of the . All sales prices and terms of sale shall be determined by . . mutual consent of the parties.

 

. PROCEEDS OF SALES.  will pay to a portion of the sales proceeds which shall be calculated as follows: percent of the proceeds from the sale of the .  The amount determined in the previous sentence shall be paid to  in installment(s) on or before the day following the installment period in which the proceeds were obtained.  The amount determined in the previous sentence shall be paid to in accordance with the attached schedule. With each net proceeds payment, will submit to a written report that sets forth the calculation of the amount of the net proceeds payment and the extent of current inventory.

 

. RECORDS.  shall keep accurate records regarding the quantities of the that are sold. shall have the right to inspect such records from time to time after providing reasonable notice of such intent to .

 

. TITLE TO MERCHANDISE. Consigned merchandise shall remain the property of until sold.

 

. LOSS AND INSURANCE.  shall be responsible for all shortages, loss, or damage, while the merchandise is under the control of . shall maintain insurance in adequate amounts to pay for replacement of the merchandise in the event of such shortages, loss, or damage.

 

. PAYROLL TAXES.  shall be exclusively liable for, and shall indemnify  against such liability for, all employee payroll taxes and insurance arising out of wages payable to persons employed by in connection with the performance of this Agreement.

 

. DEFAULTS. If fails to abide by the obligations of this Agreement, including the obligation to remit the consignment payment to when due, shall have the option to cancel this Agreement by providing days' written notice to . shall have the option of preventing the termination of this Agreement by taking corrective action that cures the default, if such corrective action is taken prior to the end of the time period stated in the previous sentence, and if there are no other defaults during such time period.

 

. DISPUTE RESOLUTION. The parties will attempt to resolve any dispute arising out of or relating to this Agreement through friendly negotiations amongst the parties. If the matter is not resolved by negotiation, the parties will resolve the dispute using the below Alternative Dispute Resolution (ADR) procedure.

 

Any controversies or disputes arising out of or relating to this Agreement will be submitted to mediation in accordance with any statutory rules of mediation. If mediation does not successfully resolve the dispute, the parties may proceed to seek an alternative form of resolution in accordance with any other rights and remedies afforded to them by law.Any controversies or disputes arising out of or relating to this Agreement will be resolved by binding arbitration under the rules of the American Arbitration Association. The arbitrator's award will be final, and judgment may be entered upon it by any court having proper jurisdiction.Any controversies or disputes arising out of or relating to this Agreement will be submitted to mediation in accordance with any statutory rules of mediation. If mediation is not successful in resolving the entire dispute or is unavailable, any outstanding issues will be submitted to binding arbitration under the rules of the American Arbitration Association. The arbitrator's award will be final, and judgment may be entered upon it by any court having proper jurisdiction.

 

. WARRANTIES. Neither party makes any warranties with respect to the use, sale or other transfer of the by the other party or by any third party. In no event will be liable for direct, indirect, special, incidental, or consequential damages, that are in any way related to the .

 

. TRANSFER OF RIGHTS. This Agreement shall be binding on any successors of the parties. Neither party shall have the right to assign its interests in this Agreement unless the prior written consent of the other party is obtained.

 

 

. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties with respect to the subject matter of this Agreement and there are no other promises or conditions in any other agreement, whether oral or written. This Agreement supersedes any prior written or oral agreements between the parties with respect to the subject matter of this agreement.

 

. AMENDMENT. This Agreement may be modified or amended, if the amendment is made in writing and is signed by both parties.

 

. SEVERABILITY. If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid or enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.

 

. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any provision of this Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.

 

. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of Commonwealth of .

 

. SIGNATORIES. This Agreement shall be signed by  on behalf of by , and by on behalf of by , . This Agreement is effective as of the date first written above.

 

.  

 

 

Consignor:

 

 

 

By:   Date:  

 

 

Consignee:

 

 

 

By:   Date:  

 

 

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___Sign this document. This document needs to be signed by:
 
 
 
 
 
 

It is not necessary that the signatures be witnessed and notarized. The Agreement becomes effective as of the date specified in the document.

 

___Everyone gets a copy. Anyone named in the document should receive a copy of the signed document.

 

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FAQs about Consignment Agreements

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  • How do I write a Consignment Agreement?

    Making a Consignment Agreement online is simple using the Rocket Lawyer Consignment Agreement template and document builder. You will answer a few questions, and a customized document will be created just for you. You may want to review these questions before you start your document:

    • Will sales under this Agreement be restricted to a specific geographical area?
    • Who will determine the sales prices and terms?
    • What percentage of the sales proceeds will the Consignor receive?
    • Will the Consignee be required to keep sales records and allow the Consignor to inspect them?

    Don't have time to finish your document now? No problem. You can save it and complete it later.

  • What should be included in a Consignment Contract?

    A Consignment Contract, or Consignment Agreement, will typically cover the following details:

    • Information about the parties
    • Merchandise to be consigned
    • Pricing and payment
    • Insurance
    • Termination

    Consult an attorney if your situation presents unusual or more complicated circumstances.

  • What are consignment payment terms?

    Consignment payment terms define how and when payments will be made to the consignor. The payment terms can include how payments will be made, the frequency of payments, and what day of each payment period will payments be due.

  • What is the typical consignment split?

    The answer to this question depends on factors such as the store's overhead, the value of the item(s), clientele, etc. On a high level, the typical consignment split allocates 60% of the sales proceeds to the consignor and 40% to the consignee.

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