Consignment agreement

by Practical Law Commercial

A standard document that provides a template consignment agreement between two businesses, such as a manufacturer or supplier (consignor) and a distributor or customer (consignee). This standard document is drafted from the consignor's perspective and is governed by the law of England and Wales. It establishes a framework where the consignor delivers goods to the consignee but retains title until the goods are either resold to a third party or used by the consignee in its own processes. The agreement addresses the key mechanics of a consignment relationship, including procedures for forecasts, consignment requests, and regular sales reporting. Key provisions cover the quality of goods, inspection and rejection rights, payment terms and obligations for storage at a designated facility. This standard document also addresses important legal and commercial issues such as intellectual property rights, limitation of liability, insurance requirements, termination rights and compliance with the Sale of Goods Act 1979.