Free Legal Contract Consignment Agreement Template
Legal Contract Consignment Agreement
This Consignment Agreement ("Agreement") is made and entered into as of [Insert Date], by and between [Your Company Name], with a principal place of business located at [Your Company Address] ("Consignor"), and [Consignee's Full Legal Name or Company Name], with a principal place of business located at [Consignee's Address] ("Consignee").
WHEREAS, Consignor is engaged in the business of [Brief Description of Business and Goods], and possesses goods that are in demand by consumers; and
WHEREAS, Consignee operates a [Type of Business], and is experienced in the sale and distribution of goods similar to those of Consignor; and
WHEREAS, Consignor desires to consign certain goods to Consignee for sale in Consignee's establishment, and Consignee wishes to accept such goods on consignment, sell them on behalf of Consignor, and return a portion of the proceeds to Consignor, all in accordance with the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
I. Definitions
A. "Goods" refers to the items provided by Consignor to Consignee for sale under the terms of this Agreement, as described in Exhibit A attached hereto.
B. "Sale Price" means the retail price of the Goods as agreed upon by Consignor and Consignee and listed in Exhibit B attached hereto.
C. "Consignment Period" is the duration for which the Goods will be held for sale by Consignee, starting from the date of delivery of the Goods to Consignee and ending 90 days thereafter, unless extended by mutual agreement.
D. "Proceeds" are the revenues generated from the sale of the Goods, less any agreed-upon commissions and expenses.
E. "Unsold Goods" are Goods that have not been sold by the end of the Consignment Period.
II. Consignment
A. Consignor hereby delivers to Consignee, and Consignee accepts on consignment, the Goods described in Exhibit A, under the terms and conditions of this Agreement.
B. Consignee agrees to exert reasonable efforts to sell the Goods at the Sale Price listed in Exhibit B, or such other price as mutually agreed upon in writing by Consignor and Consignee.
C. The Consignment Period for the Goods shall be 90 days from the date of delivery of the Goods to Consignee. Consignee shall return any Unsold Goods to Consignor within 10 days after the end of the Consignment Period, unless the parties agree in writing to extend the Consignment Period.
III. Responsibilities of the Consignor
A. Consignor shall deliver the Goods to Consignee in saleable condition, free from any defects, and in compliance with all applicable laws and regulations.
B. Consignor shall provide Consignee with detailed descriptions and any necessary documentation for the Goods, including but not limited to, care instructions, authenticity certificates, and proof of ownership.
C. Consignor agrees to indemnify and hold harmless Consignee against any claims or liabilities arising from the Consignor's breach of warranties, misrepresentation of the Goods, or any infringement of intellectual property rights related to the Goods.
D. Consignor is responsible for the cost of delivering the Goods to Consignee. If the Unsold Goods are to be returned to Consignor, Consignor shall bear the cost of such return.
IV. Responsibilities of the Consignee
A. Consignee agrees to display the Goods prominently in its establishment and make them available for sale during its normal business hours throughout the Consignment Period.
B. Consignee shall maintain the Goods in good, saleable condition, taking reasonable care to prevent damage or deterioration. Consignee agrees to be liable for any loss, damage, or destruction of the Goods due to Consignee's negligence.
C. Consignee shall provide adequate security for the Goods and insure them at Consignee’s expense against risks of fire, theft, and damage, with the policy naming Consignor as an additional insured, for the full retail value of the Goods.
D. Consignee agrees to notify Consignor within 3 days of the sale of any Goods and provide a monthly status report detailing the inventory and sales of the Goods within 7 days after the end of each month.
V. Pricing and Sale
A. The Sale Price of the Goods shall be as listed in Exhibit B, unless otherwise agreed upon in writing by both Consignor and Consignee. Any changes to the Sale Price must be approved by Consignor in writing.
B. Consignee is authorized to negotiate a discount of up to 10% of the Sale Price with customers without prior approval from Consignor. Any discount beyond 10% requires the express written consent of Consignor.
C. All sales are final. Consignee is responsible for collecting payment from customers and shall not extend credit for the purchase of any Goods without Consignor’s prior written approval.
VI. Payment and Commission
A. Consignee shall remit to Consignor the Proceeds from the sale of the Goods, less a commission of 25% of the Sale Price, within 15 days after the end of each month for all Goods sold during that month.
B. Payment shall be made by Consignee to Consignor via bank transfer to an account designated by Consignor.
C. In the event of a return of any Goods by a customer for reasons other than defect, Consignee shall be responsible for refunding the customer and may deduct the refunded amount from future payments to Consignor, provided that Consignee notifies Consignor of the return and reasons for it within 5 days of the return.
VII. Unsold Goods
A. Any Goods remaining unsold at the end of the Consignment Period, which is 90 days from the date of delivery to the Consignee, must be returned to the Consignor at the Consignee's expense within 10 days following the end of the Consignment Period, unless both parties agree in writing to extend the Consignment Period.
B. Consignee shall notify Consignor in writing at least 15 days prior to the end of the Consignment Period of any Unsold Goods. Consignor may, at its discretion, request the Consignee to return the Unsold Goods earlier or extend the Consignment Period.
C. In the event that the Consignor decides not to take back the Unsold Goods, the Consignee is authorized to dispose of the Unsold Goods in a manner agreed upon by both parties. Any costs associated with the disposal of Unsold Goods shall be borne by the Consignor.
VIII. Records and Accounting
A. Consignee agrees to maintain accurate and detailed records of the inventory, sales, and returns of the Goods, including dates of sale, sale prices, and customer information, for a period of at least one year from the date of each sale.
B. Consignee shall provide Consignor with monthly sales reports within 7 days after the end of each month, detailing the sales, returns, and current inventory of the Goods.
C. Consignor shall have the right to inspect the records related to the sale of the Goods upon reasonable notice, not to exceed once per quarter, to ensure compliance with the terms of this Agreement.
IX. Term and Termination
A. This Agreement shall commence on the date it is signed by both parties and shall remain in effect for a period of 1 year, unless terminated earlier as provided herein.
B. Either party may terminate this Agreement at any time with 30 days written notice to the other party if there is a breach of any provision of this Agreement that the breaching party fails to cure within the 30-day notice period.
C. Upon termination, all unsold Goods must be returned to the Consignor within 10 days, and the Consignee must settle all outstanding payments for sold Goods within 15 days of the termination date. Any provisions of this Agreement that by their nature should survive termination will remain in effect after termination, including but not limited to the obligations regarding Unsold Goods, final payments, and confidentiality.
X. Insurance and Liability
A. Consignee shall obtain and maintain, at its own expense, insurance coverage for the Goods against theft, damage, and loss while in its possession or control. The minimum amount of insurance coverage shall be the wholesale value of the Goods as specified in Exhibit A. Consignor must be named as an additional insured on the policy.
B. Proof of such insurance must be provided to Consignor within 10 days of the execution of this Agreement and upon renewal of the policy. Failure to maintain adequate insurance may result in termination of this Agreement by Consignor.
C. Consignee shall not be liable for any loss or damage to the Goods due to causes beyond its reasonable control, including but not limited to acts of God, natural disasters, or civil disturbances. For all other losses, Consignee's liability shall be limited to the insurance proceeds received for such loss or damage.
XI. Dispute Resolution
A. In the event of a dispute arising under or relating to this Agreement, the parties shall first attempt to resolve the dispute through good faith negotiation.
B. If the dispute cannot be resolved through negotiation within 30 days, the parties agree to submit the dispute to binding arbitration. The arbitration shall be conducted in accordance with the rules of the American Arbitration Association, and the decision of the arbitrator(s) shall be final and binding on both parties.
C. The costs of arbitration, including the arbitrator's fees, shall be shared equally by both parties. However, each party shall be responsible for its own legal fees and expenses.
XII. Confidentiality
A. Both parties agree to keep confidential any proprietary information, trade secrets, customer lists, and other non-public business information disclosed to each other in the course of executing this Agreement. This confidentiality obligation shall survive the termination of this Agreement and remain in effect for a period of 3 years thereafter.
B. Confidential information does not include information that (i) becomes publicly known through no fault of the receiving party, (ii) is received from a third party without a duty of confidentiality, or (iii) is independently developed by the receiving party without use of the disclosing party's confidential information.
C. Upon termination of this Agreement, each party shall return to the other party or destroy all materials and documents containing confidential information of the other party.
XIII. Amendments and Waivers
A. No amendment, modification, or waiver of any provision of this Agreement shall be effective unless it is in writing and signed by both parties. A waiver of any term or condition on one occasion shall not be deemed a waiver of the same or any other term or condition in the future.
B. Any delay or failure by either party to exercise any right or remedy under this Agreement shall not constitute a waiver of that right or remedy or any other right or remedy.
XIV. Governing Law
A. This Agreement shall be governed by and construed in accordance with the laws of the State of [Specify State], without regard to its conflict of laws principles.
B. Any legal action or proceeding arising out of or related to this Agreement shall be instituted in the courts of [Specify State], and each party consents to jurisdiction and venue in such courts.
XV. Miscellaneous Provisions
A. This Agreement contains the entire understanding between the parties and supersedes all prior and contemporaneous agreements and discussions, whether oral or written, relating to the subject matter of this Agreement.
B. If any provision of this Agreement is held to be invalid, illegal, or unenforceable, the remaining provisions shall remain in full force and effect.
C. This Agreement may not be assigned by either party without the prior written consent of the other party, except that a party may assign this Agreement without the other party's consent in connection with a merger, acquisition, corporate reorganization, or sale of all or substantially all of its assets.
D. All notices, requests, consents, and other communications under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when receipt is electronically confirmed, if transmitted by facsimile or e-mail; or the day after it is sent, if sent for next-day delivery by recognized overnight delivery service.
Signatures
IN WITNESS WHEREOF, the parties have executed this Consignment Agreement as of the date first written above.
Consignor
[Signature]
[Your Name]
[Title]
[Date]
Consignee
[Signature]
[Name]
[Title]
[Date]
