Sample Letter of Consignment Agreement

A consignment agreement is a type of legal agreement between a consignor and a consignee that allows the latter to sell goods on behalf of the former. This is a beneficial arrangement for both parties since it enables the consignor to get their goods onto the market without having to bear the full cost of stocking and marketing them. This article will discuss everything you need to know about consignment agreements and provide a sample letter that you can use as a reference.

What is a consignment agreement?

As mentioned earlier, a consignment agreement is a legal agreement between a consignor and a consignee. The consignor is the person or entity that owns the goods, while the consignee is the party that agrees to sell the goods on behalf of the consignor. The consignee will then take a commission on each sale, which is usually a percentage of the selling price.

The consignment agreement outlines the terms and conditions that both parties must agree to in order to establish a business relationship. These terms and conditions may include things such as the length of the consignment, the commission rate, and how the goods will be marketed.

Sample Letter of Consignment Agreement

[Your Name]

[Your Address]

[City, State ZIP Code]

[Date]

[Consignee Name]

[Consignee Address]

[City, State ZIP Code]

Dear [Consignee Name],

This letter serves to confirm that [Your Company Name] hereby appoints [Consignee Name] as our consignee for the purpose of selling our goods on consignment basis. The following terms and conditions apply:

1. The goods to be sold under this agreement are [Describe the goods in detail].

2. The consignment period will begin on [Start Date] and end on [End Date].

3. The commission rate payable to [Consignee Name] will be [Percentage]% of the selling price.

4. [Consignee Name] shall hold the goods in trust and in a secure place.

5. [Consignee Name] will be responsible for all expenses incurred in the sale of the goods, including but not limited to marketing, transportation, and storage costs.

6. [Consignee Name] shall maintain accurate records of all sales, and shall provide [Your Company Name] with a monthly report of sales activity, including the amount of goods sold and the total commission payable.

7. Upon the expiration or termination of this agreement, [Consignee Name] shall immediately return any unsold goods to [Your Company Name] in their original condition.

This consignment agreement shall be governed by and construed in accordance with the laws of [Your State], and any disputes arising out of or in connection with this agreement shall be resolved through binding arbitration.

Please indicate your agreement to these terms by signing below and returning a copy of the agreement to us.

Sincerely,

[Your Name and Signature]

[Consignee Name and Signature]

Conclusion

In conclusion, a consignment agreement is a legal agreement that benefits both the consignor and the consignee by allowing the former to get their goods onto the market without having to bear the full cost of stocking and marketing them. The sample letter of consignment agreement provided above outlines the terms and conditions that must be agreed to in order to establish a business relationship. If you`re looking to establish a consignment relationship with a potential consignee, use this letter as a starting point and tailor it to your specific needs.