What Is A Consignment Agreement?

Contents

A Consignment Agreement sets out the terms on which a supplier (the Consignor) agrees to provide supplies to another business (the Consignee) for the purposes of selling those goods.

Under a Consignment Agreement, the Consignor will retain all ownership over the goods and services being provided until the Consignee sells them onto customers.

Generally, under a Consignment Agreement, a Consignee will act like an Agent and may get a commission for the amount of goods they are able to sell on behalf of the Consignor.

When Do I Need A Consignment Agreement?

If you’re a Consignor and are looking for a company or individual to sell your goods or services to third parties, getting a well-drafted Consignment Agreement is a great place to start.

A Consignment Agreement will help protect the commercial relationship between you and your consignee.

The terms of the Agreement will outline that you’ll remain the owner of your goods until your Consignee confirms the goods have been sold onto a customer.

This means you can request that your goods be returned to you at any point during the commercial relationship.

Consignment Agreements reduce liability and clearly outline the roles and responsibilities of both your business and its customers.

What’s Included In A Consignment Agreement?

A Consignment Agreement will include a range of clauses to protect your business.

Some common provisions you can find in a Consignment Agreement include:

Duration of Agreement
Ownership and risk
Payment protections
Warranties and liabilities
Return of products not sold
Dispute resolution
Termination

Need Help With A Consignment Agreement?

A well-drafted Consignment Agreement will protect your commercial relationships with consignees.

Having a lawyer draft your Consignment Agreement will provide clear terms on which you’re engaging with consignees, ensuring that both parties are clear on what the relationship involves.

At Sprintlaw, we focus on drafting easy to understand and comprehensive contracts for many businesses.

Feel free to get in touch with us to have a chat to us about your business and your questions about a Consignment Agreement. You can reach us via email at [email protected]

Esha Kumar

Esha is a law graduate at Sprintlaw from the University of Sydney. She has gained experience in public relations, boutique law firms and different roles at Sprintlaw to channel her passion for helping businesses get their legals sorted.