A consignment agreement should include details about the parties involved, a description of the goods being consigned, pricing and payment terms, the consignment period, the percentage split of sales between the consignor and consignee, insurance details, any liability releases, and provisions for termination of the agreement.
Key elements to include in a consignment agreement:
Parties involved:
Names and contact information of the consignor (the person providing the goods) and the consignee (the seller).
Description of goods:
Detailed information about the items being consigned, including quantities, specifications, serial numbers, and any identifying details.
Pricing and payment terms:
The selling price of the goods, the commission percentage the consignee will receive, and the payment schedule for the consignor.
Consignment period:
The duration of the agreement, outlining the start and end dates when the consignee is authorized to sell the goods.
Ownership of goods:
Clearly stating that the consignor retains ownership of the goods until they are sold to a customer.
Insurance:
Who is responsible for insuring the goods while they are in the consignee's possession.
Marketing and display requirements:
Any specific instructions on how the consignee should market and display the consigned items.
Liability releases:
Provisions regarding potential damage to the goods while in the consignee's care and who is responsible for such damage.
Termination clause:
Conditions under which either party can terminate the agreement, including potential penalties for early termination.
Dispute resolution:
How any disputes arising from the agreement will be handled, such as through mediation or arbitration.
Governing law:
The jurisdiction where the contract will be enforced.
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