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A Consignment Agreement is a document between two parties, called the "Consignor" and the "Consignee," where one party (the Consignee) agrees to sell goods on behalf of the other party (the Consignor). The Consignor is the person to whom the goods belong. Often, this is just an individual looking for an easy and quick way to sell goods. The Consignee is the person who is permitted to sell the goods on behalf of the Consignor. Often, this is the storefront or business that runs specifically for this reason - most are called Consignment Shops.
Consignment Agreements can be drafted for any sort of consignment sale between two parties. They can be used to sell just one product or a series of products. In Consignment Agreements, the Consignee agrees to sell the product under certain conditions (such as that delivery is made, they get a specific fee, etc.) and the Consignor gives Consignee the right to sell under those same conditions. For the Consignor, these agreements can be very effective because the Consignor does not have to do the work of sale themselves.
Within these agreements, the Consignor and Consignee outline their expectations for behavior and agree to the bounds of the relationship between them.
In a Consignment Agreement, the most important details of the parties' relationship will be entered: things such as a description of the product being offered for sale, as well as pricing information, and how the fees will be split. A good Consignment Agreement will also have both parties covered in case anything goes wrong: things such as dispute resolution and governing law should be included.
How to use this document
This document can be filled out either by the Consignor or the Consignee.
In this document, the form filler will be able to enter pertinent identifying details, such as whether the parties are individuals or businesses, and their respective addresses and contact information. The form filler will also input the most important characteristics of the agreement between the parties, like the payment structure and consequences in case the Consignee doesn't perform.
This Consignment Agreement will help you outline the expectations of both parties before the work actually begins.
When this agreement is filled out, it should be printed, signed by both parties, and a copy should be kept with each.
Consignment agreements in the United States are covered under Article 9 of the Uniform Commercial Code.
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