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Things you need to know about Consignment Agreement for Sale of Goods (Exclusive Distributor).


1. What is a Consignment Agreement for Sale of Goods? 

A Consignment Agreement for Sale of Goods is an agreement between the owner of the goods (the “consignor”) and another person (the “consignee”) for the consignee to sell the goods on the consignor’s behalf.  Under such arrangement the consignor receives the sales price while the consignee receives a commission.

The Consignment Agreement sets out the complete terms of the consignment and the respective rights and obligations of both parties.  It contains basic provisions such as a description of the goods being sold and the amount of the consignee’s commission.  It may also include detailed provisions depending on your situation such as (a) the imposition of a deadline to sell the goods; and (b) the degree of care the consignee must exercise when handling the goods.


2. When do you need a Consignment Agreement for Sale of Goods?

A Consignment Agreement for Sale of Goods is used when you want another person to sell goods on your behalf.


3. How can a Consignment Agreement for Sale of Goods protect you?

A Consignment Agreement for Sale of Goods protects both the consignor and consignee because it puts in writing the respective rights and obligations of the consignor and consignee.

For the consignor, the Consignment Agreement states the consignor’s right to receive the sales price and sets the consignee’s rate of commission.  It also protects the consignor’s goods by stating how the consignee should store, handle and sell the goods and the level of care the consignee should exercise in handling the goods.  

For the consignee, the Consignment Agreement states the consignee’s right to receive a commission, the amount of the commission and when he should receive it.  It also provides if the consignee can already deduct his/her commission from the sales proceeds to be remitted to the consignor.


4. What information do you need to create the Consignment Agreement for Sale of Goods?

To create your Consignment Agreement for Sale of Goods, you’ll need the following minimum information:

  1. The type of consignor (i.e. individual or business) as well as name and details (i.e. nationality and address)
  2. The type of consignee (i.e. individual or business) as well as name and details (i.e. nationality and address)
  3. Brief description of the property to be consigned 
  4. Basic terms of the consignment (i.e. term of the consignment, the consignee’s commission)

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