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What does a consignment agreement typically include?

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Quick Answer

A consignment agreement typically includes details such as the commission rate, deadline for sale, rent and administration fees, the parties' rights in the event the goods do not sell, and responsibility for stolen or damaged goods, according to Rocket Lawyer and Soap Queen. Consignment agreements may also include provisions governing delivery and pickup of the goods and the storage of items not on display.

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Full Answer

A consignment agreement is a contract between a person who wishes to sell goods, a consignor, and a person who agrees to sell the goods on the consignor's behalf, the consignee, explains BizMove. Consignment agreements benefit consignors by providing them with a way to market their goods to the general public. Consignees benefit from not having to use their own funds to obtain merchandise.

Consignment agreements are flexible, and both parties may insist upon the addition of customized terms. Consignors may wish to include provisions specifying the placement of their goods in high-traffic areas of the consignee's store, notes BizMove. Agreeing to a higher commission may also benefit consignors if there is a risk that the consignee may prioritize the sale of goods they own outright over the sale of consigned goods. Consignees may insist on provisions regarding the storage of perishable goods when not on display.

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