Ready-to-Use Consignment Agreement Contract Template
This consignment agreement template helps a supplier and a seller record the terms under which goods are delivered for sale on the supplier’s behalf. It covers inventory, pricing, commission, payment timing, ownership, insurance, returns, reporting and termination, with spaces for tailored commercial details.
A consignment agreement is used when one party supplies goods to another party to sell on its behalf. The supplier, commonly called the consignor, generally retains ownership until a sale to the final customer occurs. The seller, or consignee, receives a commission or agreed margin for arranging the sale. A clear written agreement reduces uncertainty about stock, payments, unsold goods and responsibility for loss or damage.
What a Consignment Agreement Covers
This contract records the commercial arrangement between the owner of goods and the party responsible for displaying, marketing or selling them. Unlike an ordinary sale of goods, the consignee does not usually buy the inventory at the time of delivery.
The agreement should identify the goods precisely, establish the selling process and state how proceeds will be divided. It should also explain what happens if products are not sold during the agreed period.
Key roles in the arrangement
The consignor supplies the goods and normally keeps legal title until each item is sold. The consignee holds the goods, promotes them, completes sales in accordance with the agreed terms and accounts for the proceeds.
Essential Information to Include
The parties should use full legal names, addresses and, where appropriate, registration or tax identification details. Attach a detailed inventory list whenever possible, including descriptions, quantities, condition, serial numbers and agreed retail prices.
| Document field | Purpose | Common mistake |
|---|---|---|
| Inventory description | Identifies goods delivered on consignment | Using vague descriptions without quantities or condition |
| Sale price | Sets the price authorised by the consignor | Allowing discounts without written approval rules |
| Commission | States the consignee's fee or percentage | Not clarifying whether taxes and expenses are included |
| Payment schedule | Sets when sale proceeds must be remitted | Failing to require periodic sales reports |
| Return procedure | Explains treatment of unsold goods | Omitting transport costs and return deadlines |
Pricing and discount authority
Specify whether the consignee may change prices, grant discounts, bundle goods or offer credit to customers. If approval is required, state how it must be obtained and documented.
Editable template
Document template
CONSIGNMENT AGREEMENT
This Consignment Agreement (the “Agreement”) is made in ____________________, on ____________________.
CONSIGNOR: ____________________, of ____________________, registered/identified under ____________________, represented by ____________________ (if applicable).
CONSIGNEE: ____________________, of ____________________, registered/identified under ____________________, represented by ____________________ (if applicable).
The Consignor and the Consignee are collectively referred to as the “Parties.”
| Variable | Details |
|---|---|
| Goods / concept | ____________________ |
| Inventory reference or schedule | ____________________ |
| Quantity and condition at delivery | ____________________ |
| Authorised sale price | ____________________ |
| Commission or margin | ____________________ |
| Consignment period | From ____________________ to ____________________ |
| Reporting and payment deadline | ____________________ |
| Insurance / storage arrangements | ____________________ |
- Purpose. The Consignor delivers the goods described in the inventory schedule to the Consignee for sale on consignment under the terms of this Agreement.
- Ownership. Legal title to the goods remains with the Consignor until each item is sold to a final customer, unless applicable law provides otherwise.
- Custody and care. The Consignee shall store, display and handle the goods with reasonable care and shall keep accurate records of goods received, sold, returned, lost or damaged.
- Sales and pricing. The Consignee may sell the goods only at the authorised sale price stated above, unless the Consignor gives prior written approval for a different price or discount.
- Commission and payment. The Consignee shall retain the agreed commission or margin and remit the remaining sale proceeds to the Consignor within ____________________ after each reporting period.
- Reports. The Consignee shall provide written sales and inventory reports every ____________________, showing sales, returns, stock on hand and amounts due.
- Loss, damage and insurance. Responsibility for loss, damage, theft and insurance shall be allocated as follows: ____________________.
- Unsold goods and returns. At the end of the consignment period, or upon termination, unsold goods shall be returned to the Consignor within ____________________. Return costs shall be paid by ____________________.
- Termination. Either Party may terminate this Agreement by giving ____________________ written notice, without affecting amounts already due or obligations relating to goods in custody.
- Governing law and disputes. This Agreement is governed by the laws of ____________________. Any dispute shall be resolved by ____________________ in ____________________.
Any amendment to this Agreement must be made in writing and signed by both Parties.
Signed by the Parties on the date stated above.
____________________
Consignor
Name: ____________________
Date: ____________________
____________________
Consignee
Name: ____________________
Date: ____________________
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Terms That Protect Both Parties
Ownership, risk and insurance should be addressed separately. Even when the consignor retains title, the contract should allocate responsibility for theft, accidental damage, storage and insurance while the goods are in the consignee’s possession.
- Detailed inventory and condition records at delivery.
- Authorised retail prices and discount limits.
- Commission rate, deductions and tax treatment.
- Sales reporting and remittance dates.
- Rules for insurance, loss, damage and returns.
Keep signed delivery records and reconcile the inventory against sales reports regularly; this is often the simplest way to prevent disputes over missing or unsold goods.
How to Complete the Template
Before signing, both parties should review the commercial terms and ensure that the inventory schedule matches the goods physically delivered. Add any product-specific requirements, such as storage conditions, brand presentation standards or regulatory compliance obligations.
- Enter the parties’ legal details and the effective date.
- List the goods, quantities, condition and authorised prices.
- Set the commission, reporting frequency and payment deadline.
- Confirm the return, termination and dispute-resolution provisions before signing.
Managing the Consignment Relationship
Regular written reports help the consignor monitor sales, stock levels, customer returns and amounts due. The consignee should keep consigned goods identifiable and, where practical, separate from its own inventory.
The agreement should also state whether the consignee can appoint sub-agents, sell online, use the consignor’s intellectual property or incur promotional expenses. These matters can materially affect both control and costs.
Frequently Asked Questions
Who owns goods under a consignment agreement?
In a typical consignment arrangement, the consignor retains ownership of the goods until they are sold to an end customer, subject to the specific contract and applicable law.
Can the consignee return unsold goods?
Yes, if the agreement permits it. The contract should state the return deadline, condition requirements, transport arrangements and which party pays the associated costs.
Is a consignment agreement the same as a sale contract?
No. A sale contract usually transfers ownership to the buyer when the parties agree or when goods are delivered. Under consignment, the consignee generally sells goods for the consignor rather than purchasing them outright.