A consignment agreement is a formal arrangement between two people. One person gives goods to sell to another person. The second individual agrees to bear the responsibility of selling the items on behalf of the supplier. They receive a payment such as a fee or commission for services rendered. It is usual that this form of contract exists in many industries including for instance; retail outlets, art galleries, etc.
Key Elements of a Consignment Agreement:
The following are key elements that every agreement must have to be effective.
Parties Involved:
Consignor
Consignee
Description of Goods
Pricing and Payment Terms
Duration of Agreement
Responsibilities of the Consignee
Responsibilities of the Consignor
Risk and Insurance
Unsold Goods
Dispute Resolution
Governing Law
Example Scenario:
In a consignment agreement, a local artist (the consignor) has an agreement with the gallery (the consignee). The gallery will be given by an artist for sale a couple of paintings. All paintings made available for sale by the gallery shall be exhibited and sold on behalf of the artist. Once a painting sells, the gallery receives 30% and remits a 70% commission to the artist. It is noted that the contract provided for the return of any unsold paintings within six months.
The purpose of a consignment agreement is to spell out the terms and expectations of both parties, ensuring mutual understanding and reducing conflicts. Plugin: insert the code into CMS and it will be ready for use.
I have prepared these free templates using MS Word. Below are the previews and download links.
