Last revision: 03/23/2023
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A Consignment Agreement is a document between two parties, the "Consignor" and the "Consignee" for the sale of goods on consignment. A sale on consignment means that the Consignee will sell the goods for the Consignor for a fee. The Consignor is the owner of the goods that the Consignee will sell.
For example: Maria designs jewelry such as necklaces, bracelets, and earrings. Maria wants to sell her jewelry but doesn't want to open a store. In order to sell her goods, Maria enters a Consignment Agreement with Ryan who owns a shop. Maria delivers the jewelry to Ryan so he can display it in his shop. Although the Maria delivered the jewelry, the ownership of the jewelry remains with Maria. When Ryan sells the jewelry to the customers of his shop, Ryan gives the selling price to Maria (minus his commission for selling the jewelry). If Ryan fails to sell the jewelry, the jewelry should be returned to Maria since they are still her property.
A Consignment Agreement can be used to sell just one product or a series of products. A Consignment Agreement is beneficial to both parties as the Consignee will not have to pay for the goods that they will sell while the Consignor will not have to exert effort in selling the products.
If the parties want to enter into an agreement wherein the one party will buy the products from another party for the purpose of re-selling the same, then the parties should use a Distribution Agreement.
How to use this document
This document can be filled up by either the Consignor or the Consignee. In either case, the user should enter all the information required to complete the document. Once completed, the user should print at least three (3) copies of the document. If there are any attachments to the document, the attachments should be marked and attached to all the copies of the document. Marking the attachments means identifying the attachments by writing the words "Annex "A", Annex "B", and so on, on the attachments. The sender should use the document as a guide to properly mark the attachments. For convenience, the attachments have been emphasized in bold. Once the document has been printed and the attachments attached, if any, the parties should review and, if everything is found to be correct, sign the document.
This document also contains an Acknowledgment. An Acknowledgment is an act of a person before a notary public stating that the signature on a document was voluntarily affixed by him and he executed the document as his free and voluntary act. Acknowledging a document before a notary public turns document into a public document. Public documents are generally self-authenticating, meaning no other evidence will be needed to prove the execution of the document. If the document will be acknowledged, the parties should present themselves before a notary public with all the copies of the document and swear an oath to the foregoing.
If the document is acknowledged, the notary public will keep one original copy of the document. The Consignor and the Consignee should each keep a copy of the document for their records.
The laws on Contracts and Obligations as well as the laws on Sales and Agency found in the Civil Code of the Philippines applies to this document.
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Other names for the document: Agreement to Consign Goods, Agreement to Sell Goods On Consignment, Consignment Agreement Form, Contract to Consign Goods, Contract to Sell Goods on Consignment