Consignment Agreement

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Consignment Agreement

A consignment agreement is created and used for two parties who enter into a business relationship where one party supplies goods while the other party sells the goods. To "sell on consignment" means the seller doesn’t have to pay the supplier until after the product has sold. This arrangement is efficient for both parties as it requires a minimal investment from each side.

The supplying party is the consignor. Consignors benefit from this consignment relationship because they don’t have to expend funds and energy looking for and maintaining an outlet to sell their products.

The selling party is the consignee. Consignees only pay for the products that are purchased by the consumer (unless the "risk of loss and damages" section of the agreement states otherwise).

What Are the Components of a Consignment Agreement?

A consignment agreement is designed to clearly set out the obligations and expectations of each party in the consignment relationship.

The basic components that appear in every consignment agreement include:

Do I Need a Lawyer If I Draft A Consignment Agreement?

Consignment agreements can be difficult to understand and implement. In addition to helping you draft a consignment agreement, a business lawyer can assist you with negotiations so your requirements are met.

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Last Modified: 05-09-2014 02:37 PM PDT

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