An example of a consignment agreement is an arrangement under which a business, on behalf of the owner, agrees to deliver goods or services to a purchaser. The agreement may also include provisions concerning the return of the goods and any associated costs. Such agreements often provide for the payment of an agreed fee to the seller, if goods are not delivered in accordance with the contract.
While this type of agreement is not a new invention, many people are still unfamiliar with the contract structure used in the example of the consignment agreement. Many people may question what is meant by the term “goods.” It is important to understand that the terms used in this document are entirely descriptive of the goods and services that are being sold. In other words, this is not an inventory list or an agreement about how to transport products from one place to another.
Popular Retail Consignment Agreement wn42 – Documentaries For Change from example of consignment agreement, source: documentariesforchange.org
In many cases, the contract can be drafted with reference to the items that will be delivered. This can result in an agreement about the location, date, method of delivery and payment of fees. If a business sells products, such as goods, that are rare, valuable or exotic, then it may be able to obtain a greater amount of protection and thus a higher price from the seller.
A consignment agreement is not designed to prevent the seller from returning the goods to the business. The contract allows for this right and makes provision for the buyer to collect the goods on delivery. It is therefore important to understand that the consignment agreement does not make a business liable for any goods that are returned.
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It is also important to understand that any agreed fee to the seller must include all costs involved in transporting the goods and in returning them. It is in this regard that the consignment agreement is different from a purchase order or a retail sales contract. An example of a consignment agreement generally provides that the seller agrees to accept payment by cash, debit, or credit card and that the seller will forward to the business all related documents and paperwork.
It is possible for a seller to accept payment by check, however it should be understood that the business is responsible for paying for the goods and the amount due to the seller on the sale. If a check is returned by the buyer, then the business should be aware of the full name, address, occupation, and telephone number of the person to whom the check was issued. This information is necessary to ensure that the person can collect it on delivery.
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An example of a contract will usually provide for a provision whereby the seller has the right to cancel the contract at any time prior to its expiry. This provision is designed to allow the seller to take back the goods at the end of the contract. If the business should then find that it cannot meet the agreed delivery schedule, the contract can be terminated.
An example of a consignment agreement is often drafted to provide for an agreed time period, commonly two to three years, when goods may be returned by the buyer. At this point the business can sell the goods back to the owner or dispose of them in a manner that is consistent with the contract. If the goods are no longer required by the buyer, they can be resold to another party.
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An agreement should always state whether the agreed return of the goods means that the seller has to reimburse the cost of delivery. If the agreement does not state this then the seller may be held liable for these costs. It is important to know what a seller has to reimburse the business in the case of a sale as failure to do so may leave the business liable to pay the cost of goods for an extended period of time.
It is important to understand that the contract should also state clearly what happens to the buyer’s money if the contract is terminated early. This may allow the buyer to reclaim part of the money owed to it. In many instances the business is unable to obtain repayment of the money owed to it if the contract is terminated by the seller early because the buyer has already exercised the rights of redemption.
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An example of a contract should also provide for a provision allowing for the payment to be made by the seller in the event of the buyer making a claim for loss or damage to the goods. This is important as it ensures that the seller does not incur any further costs in returning the goods to the business. If a company is unable to sell the goods back to the business, the contract should state what it has to do with the issue of recovery.