Consignment Agreement Terms

Consignment Agreement Terms: Key Considerations for Both Parties

A consignment agreement is a legal contract between two parties – the consignor (seller) and the consignee (buyer) – that outlines the terms and conditions of the consignment sale of goods or merchandise. This type of agreement is common in the retail industry, particularly in consignment shops and online marketplaces. In this article, we`ll discuss the key considerations that both parties should keep in mind while drafting and signing a consignment agreement.

1. Description of Goods: The consignment agreement should clearly and accurately describe the goods that are being consigned. This includes the type, quantity, condition, and any other relevant details. It is also important to include a provision stating that the consignor has the legal authority to sell the goods.

2. Duration of Consignment: The agreement should specify the length of the consignment period. This can range from a few days to several months, depending on the nature of the goods and the agreement between the parties. The contract should also include the terms for renewal or termination of the agreement.

3. Pricing and Payment Terms: The agreement should specify the pricing and payment terms for the consignment sale. This includes the commission or fee that the consignee will charge the consignor, and the method and frequency of payment. It is important to clearly define all terms related to payment, including any late payment fees or penalties.

4. Delivery and Pick-up of Goods: The agreement should specify the method and timeline for the delivery and pick-up of the goods. This includes any shipping or handling costs, and the responsibility of the consignor for preparing and packaging the goods for transport.

5. Liability and Insurance: The agreement should define the liability of both parties in the event of loss, damage, or theft of the consigned goods. It should also specify whether the consignor or consignee is responsible for obtaining insurance coverage for the goods during the consignment period.

6. Marketing and Promotion: The agreement should outline the responsibilities of both parties for marketing and promoting the consigned goods. This includes any restrictions on advertising or promotion of the goods by the consignor, and any obligations of the consignee to promote the goods through social media, email marketing, or other channels.

7. Dispute Resolution: The agreement should specify the process for resolving any disputes arising from the consignment sale. This can include mediation, arbitration, or litigation, and should be governed by the laws of the state or country where the agreement is being executed.


A consignment agreement is a legally binding contract that outlines the terms and conditions of a consignment sale of goods or merchandise. By considering the key factors outlined above, both the consignor and consignee can ensure that they are entering into a fair and mutually beneficial arrangement. As a copy editor, it is important to ensure that all terms are clearly defined and accurately reflect the intentions of both parties.

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