How do you prepare a consignment agreement?


Quick Answer

A good consignment agreement contains an introduction, description of the products that a consignor agrees to supply to the consignee, the selling price of the products and the commission that the consignee should get from selling the products, according to Legal Match. The agreement should also include a termination clause, arbitration clause, date of the agreement and personal details of the consignor and consignee, including their names and signatures.

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Full Answer

The introduction contains the identities of the consignor and the consignee and the role of each of them, notes Legal Match. The roles of the consignor and consignee are supply of products and selling of the products respectively. The product description contains identities of the specific products under consignment and their quantity. The termination clause contains the procedure for dissolving the agreement, including the person with the right to terminate the agreement, the duration of terminating the agreement and handling of the pending stock that the consignee has not yet sold. The arbitration clause stipulates how to deal with any disagreement that arises between the consignor and consignee.

A consignment agreement is a document in which a supplier of goods offers to give the goods to a seller, while the seller agrees to pay the supplier for the goods after selling them, explains Legal Match. Although drafting the agreement can be a do-it-yourself task, it is advisable to hire the services of a business attorney to do the job in order to avoid possible mistakes.

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