There are different varieties of contracts being used in this age and time, and all of them are specially made for the their specific use and purpose. The industry that uses contracts the most is the business industry. A contract is being used in real estates, business partnership, security contracts, and in investment contracts as well. It is because a contract provides equal protection and benefits to all of the parties involved in it.

In this article, our main focus will be on consignment contracts. There are 9+ of the best consignment samples and templates attached to this article to help you further understand what it is and at the same time serve as your visual aid in learning the topic. Basic and important information about consignment contract have also been included, like what it is, what is included in the contract, and and dos and don’ts about writing contracts.

Consignment Agreement Template in Word

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Consignment Agreement Contract in PDF

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Consignment Agreement Contract for Store Insurance

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Vehicle Consignment Agreement Contract Template

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Sale of Goods on Consignment Agreement Contract Template

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What Is a Consignment Contract?

A consignment contract is an agreement between two parties regarding the storage, sale or resale, and transfer of goods and other commodities. In simple terms, the agreement is about asking someone to store and sell your products on your behalf. Just like any other contracts we know, there are two parties involved in a consignment contract. They are the consignor and the consignee. The consignor is the owner of the products or goods that are being sold in a consignment shop, and the consignee is the person who is asked to sell the products or goods. They are usually the owner of the consignment shop. A consignment shop is considered as one of those locally-owned businesses in a particular area. They are often referred to as mom-and-pop stores mostly because they are a family-owned business and are mostly being handled by the mom and dad of a family.

In a consignment agreement contract, the consignee handles the products or goods of the consignor and displays it in their store. The consignor does not pay the consignee until their products or goods are sold, if ever they get sold. If the products don’t get sold, the consignee will have it returned to the consignor without any payment. Some consignees ask for a very little amount as payment for enlisting or storing the products. If the products get sold, the consignor gets paid for the goods that have been sold. The consignee also gets paid a little fee that serves as a compensation for selling their products or goods on their behalf.

What Is a Consignment Item?

There are shops where the seller sells products or goods that they don’t own and where they don’t earn anything unless the products or goods are sold. It seems unusual at first, but this is actually a legal transaction using a legal contract that is being practiced all over the world. In a consignment, the goods or products that the consignee sells in their consignment store are known as consignment items. As mentioned above, the consignee doesn’t own the items and did not make payments for it. It is through a consignment contract with the consignor or the owner of the items that they are placed there.

What Is the Difference between a Consignment Shop and a Consignment Sale?

When a certain shop sells your goods or products on your behalf, then that is referred to as consignment. That is pretty easy to understand, especially if you have made the same business style or process before. Also, you might come across the terms consignment shop and consignment sale. Although both are about consignment and may be similar at one point, they actually have distinct features that show how different they are. We have made a comparison below about the difference between a consignment shop and a consignment sale.

Consignment Shop

  • There are specific cycles on how long you would want your products to be sold or displayed in consignment shops. Your consignment items can be dropped off the consignment shop for a 30-day cycle, a 60-day cycle, or a 90-day cycle, depending on your contract.
  • There is very little inventory done with products sold or displayed in consignment shops.
  • Selling in consignment shops works best if you have high-end product brands to sell or if you are selling antique and collector’s items.
  • The items that don’t sell within the agreed upon period will be sold by the consignment shop at a discounted price. If you don’t want that, then you may pick up your items.
  • It takes a long time for you to be able to see the results or get sales for items sold or displayed in consignment shops.
  • For sold items, the consignment shop will charge you a 25% to 60% commission, which they collect after making the sale. This also depends upon what has been agreed on your contract.
  • If you need to earn money right away, selling your products or goods in a consignment shop might not be the best option available for you.

Consignment Sale

  • Unlike consignment shops that last for 30, 60 to 90 days cycle, consignment sales are pretty short and intense. They just last for for 2 to 4 days in vacant spaces and they usually happen on weekends.
  • If you are looking forward to earning money quickly, then a consignment sale is what you want to do.
  • There would be a lot of people coming in to check out the sale and you would see a lot of shoppers going through your items.
  • If there is little inventory to be done in a consignment shop, it is actually the opposite in a consignment sale. You will need to face a very large inventory for a consignment sale because there will be a lot for you to sell in one place.
  • With consignment sales, you are able to get immediate results compared to consignment shops that take a lot of time.
  • You can sell a large selection of items in a consignment sale and still get them sold without so much difficulty.
  • In a consignment sale, you will be the one to prepare for the price tags of the items you will be putting on sale and have to drop them off a few days before the sale event or when the organizers of the event open the doors for the venue.
  • There is usually an entry fee of $10 to $15 that you need to pay in order to be able to participate in the sale.

Other consignment-related articles we have available on our website are consignment note samplesconsignment contract templates to download, and many more. You can check them out on our website for free!

Auto Dealer Consignment Agreement Contract Template

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Consignment Agreement Contract in Store Template

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Used Vehicle Consignment Agreement Contract Template

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Printable Consignment Agreement Contract Sample

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Property Consignment Agreement Contract Template

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What Things Are Included in a Consignment Contract

Before you start writing your very own consignment contract, you need to know about the things that should be put in including all other essential elements that will make the contract valid. Making sure that your contract is complete is important because it will keep you out of any trouble that might be brought about by an incomplete contract. Below is a list of the things that you should see in a consignment contract.

  • The heading or title of the contract
  • The name of the consignment shop or consignment sale organizer
  • The address of the consignment shop or consignment event venue
  • The names of the people or parties involved in the consignment contract or the names of the consignor and consignee
  • The length of time of the consignment
  • The exact start and end date of the contract
  • The consignment store’s contact information, like email address, telephone number, and cell phone number
  • The specifications and details of the specific merchandise that will be part of the contract, like the type of merchandise or items
  • Description of the condition of the merchandise, if they are brand new, slightly used, in good condition, etc.
  • A statement about what merchandise is acceptable and the right of the store personnel to refuse the merchandise that does not meet their standards
  • The full terms and conditions of the consignment contract, which includes the duties and responsibilities of both parties, grounds and remedies for contract breaches, and many more
  • The payment structure of the consignment contract as to the amount or percentage that goes to the consignor and the amount that goes to the consignee, as well as the payment scheme
  • The consignment shop’s policy about how to dispose of unsold merchandise, like if the owner would want to pick it up after the contract due date or if they want to donate it to charity
  • The signatures of both parties signifying that they agree to everything about the consignment contract

Those are pretty much some of the things that you should look out for in a consignment contract and that is regardless if you are going to write one for your own use, if you are planning to get yourself involved in a consignment contract. Know more about contracts by checking out these popular contract-related articles, like info about franchise contracts and agreements, effective tips for making solid business contracts, and guidelines for writing freelance contracts.

Dos and Don’ts in Writing Contracts

Writing contracts is never easy, a lot of people often prefer having legal professionals like lawyers write the specific contracts they are going to use. One should be very keen on details and know a lot about the law for them to be able create a reliable and valid contract. But it is never impossible for you to be able to write one, regardless if you are a legal professional or not. With the different types of samples contract agreements and simple contract templates available online, you are sure to get started with making your own contract. To further help you, we have laid out some tips for you to use below.

  • Do make your contract formal. A contract will always be a formal document aside from being a legal document. It is very important that everything written in it be done in the most formal manner.
  • Do write all of the terms and conditions in separate paragraphs. Each paragraph should thoroughly explain the term or condition with which it is under.
  • Don’t forget to write clearly and concisely to avoid any confusion or misunderstanding with any parts of the contract. This will also make it easy for people to be able to read and understand the entire contract.
  • Do provide a table of contents and a definition of terms in your contract. The table of contents will make it easy for the reader to look for the specific information that they need. The definition of terms will be a great help to when it comes to technical terms.
  • Don’t change any part of the contract after it has been agreed on and signed by all of the parties involved in it. It will make the contract invalid and illegal. If you really must make changes, it should be discussed first to all the involved parties, and if an agreement is met, only then can it be changed.
  • Do include all of the important contract clauses in your contract. These clauses may make or break your contract. It can also cause you a lot of trouble.
  • Don’t include any terms or conditions that cannot be done or are impossible to do. If it is something impossible, then it cannot be considered a valid contract.
  • Do perform a spelling check and a grammar check on your contract before you finalize it and show it to the other parties who are involved. An error-free contract will look neat and professional, and most of all, it will look and sound reliable.

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