Consignment Agreement

How To Use

Consignment agreements rarely work very well and the Consignor should work diligently to move the Consignee to being a paying customer. Deep discounts are much to be preferred to the consignment, “Try it, you’ll like it,” approach.

As a practical matter for the Consignor should review the relationship monthly to be sure the terms and conditions are being lived up to and see if a possibility to converting the Consignee to a customer. Remember, a consignment is not a sale and should not be accounted for in that manner according to GAP (Generally Accepted Accounting Principles).

If you attempt to pledge a consignment sale to almost any financial institution as a Sale or Accounts Receivable, you will be in violation of the agreement and usually chargeable with fraud for that action. So be very careful how you account for any consignment transaction.

  • Print multiple copies with each party having one. Be sure to provide a copy to your outside financial institutions, if required by agreement with them. Keep a copy with the Consignee’s file as well as in your minute book.

Consignment Agreement

This Consignment Agreement (“Agreement”)made as of _____________ (Date), by and between ___________________________ (“Consignor”) and __________________________ (“Consignee”).

Whereas the Consignor wishes to sell certain products (“Products”) on consignment and Consignee wishes to sell the Products on behalf of the Consignor;

Therefore in consideration of the premises, the covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties hereto agree as follows:

1. Sale by Consignment.

The Consignee will, from time to time, place orders for the Products from the Consignor. The Consignor may, at its sole discretion, accept such orders and ship such Products on consignment to the Consignee, subject to and in accordance with the terms and conditions of this Agreement. The Consignee shall take delivery and make payment as required hereunder for all Products ordered by it, but nothing in this Agreement shall be deemed to obligate the Consignor to fill any or all of the Consignee’s orders for Products.

2. Ownership of Products.