Fillable Printable CONSIGNMENT AGREEMENT RECITALS

CONSIGNMENT AGREEMENT RECITALS

CONSIGNMENT AGREEMENT: example of a form that may be used to document

an agreement for a consignee to sell and distribute a manufacturer’s merchandise

[Referring to Section Four of the agreement. This particular agreement anticipates that the

consignee remits the gross sale proceeds to the principal, with an accounting, (paragraph B) and

that the principal pays the consignee a commission, on the prior period sales (paragraph C). A

more usual arrangement would be for the consignee to remit net proceeds, retaining the

commission portion.

The form is easily amended by eliminating paragraph C and adding after the words "sale of

goods" in paragraph B the following language: ",net of commissions for such sales in accordance

with the commission schedule set forth in Exhibit ________, which is attached to this

agreement."]

CONSIGNMENT AGREEMENT

Agreement made, effective as of ________[date], by and between ________ [name], of

________[address], City of ________, County of ________, State of ________,

subsequently referred to as principal, and ________[name], of ________[street address],

________[city], ________[county], ________[state], subsequently referred to as

consignee.

RECITALS

The parties recite and declare:

A. Principal conducts a manufacturing business described as follows: ________.

B. Principal desires to arrange for the sale and distribution of its merchandise

throughout ________[territory].

C. Consignee has agreed to undertake the marketing of principal’s merchandise on the

terms set forth in this agreement.

In consideration of the above recitals, the terms and covenants of this agreement, and

other valuable consideration, the receipt of which is acknowledged, the parties agree as

follows:

SECTION ONE

EXCLUSIVE APPOINTMENT

Consignee shall have the exclusive right to sell and distribute principal’s merchandise

throughout ________[territory] during the term of this agreement.

SECTION TWO

DELIVERY OF MERCHANDISE

A. Principal shall deliver to consignee such quantity of its merchandise that consignee

requires for sale from ________[his or her or its] place of business at ________[street

address], ________[city], ________[county], ________[state].

B. Principal shall pay all freight and shipping charges.

C. Consignee shall be responsible for any loss of or damage to merchandise while it is

under ________[his or her] control.

SECTION THREE

SALE OF MERCHANDISE

A. Consignee shall devote ________[his or her] best efforts to the sale and distribution

of principal’s merchandise throughout the territory referred to above.

B. All sales made by consignee shall be for cash. Credit sales may be made by

consignee on written authority only, and on terms which principal may approve prior to

such sales.

C. All sales prices shall be fixed by principal.

D. Consignee shall not sell principal’s merchandise at less than the authorized prices,

which prices will be reflected in price schedules that will be furnished to consignee

from time to time.

SECTION FOUR

MONTHLY STATEMENTS; COMPENSATION

A. Consignee shall furnish principal with monthly statements indicating all sales

transactions during the preceding month and the extent of current inventory. Such

statements shall be received by principal no later than the ________ day of each month.

B. With the monthly statement, consignee shall remit to principal all monies received

by ________[him or her] from the sale of goods, ________[if appropriate, add:

together with signed receipts or bills of lading for credit sales].

C. As soon as practicable after the ________ day of each month, principal shall render

a written statement to consignee showing sales during the preceding month, and shall

remit to consignee net commissions for such sales in accordance with the commission

schedule set forth in Exhibit ________, which is attached to this agreement.

SECTION FIVE

MANAGEMENT OF CONSIGNEE’S BUSINESS

A. Consignee shall have entire charge of the management and operation of

________[his or her] business; ________[he or she] shall furnish all equipment and

vehicles, and hire and pay the wages of all assistants and employees required for the

operation of ________[his or her] business.

B. Principal reserves no supervision or control over consignee in the facilities,

employees, and methods to be used and employed by consignee in carrying out the

purposes of this agreement, and shall in no event be responsible for negligence of

consignee or consignee’s employees.

SECTION SIX

TITLE TO MERCHANDISE

Consigned merchandise shall remain the property of principal until sold in the regular

course of business, except that consignee shall be responsible for all shortages of stock.

SECTION SEVEN

EMPLOYEE BENEFIT PAYMENTS

Consignee shall and does accept full and exclusive liability for the payment of any and

all premiums, contributions, and taxes for workers’ compensation insurance,

unemployment insurance, and for pensions, annuities, and retirement benefits, now or

later imposed by or pursuant to federal and state laws, which are measured by the wages,

salaries, or other remuneration paid to persons employed by consignee in connection with

the performance of this agreement. Consignee shall indemnify principal against any and

all liability for any premiums, taxes, or contributions respecting consignee’s employees

that may be assessed against principal. Consignee shall enter into any agreement that has

been or may later be prescribed by any federal or state governmental body or authority to

effectuate the above-stated purposes.

SECTION EIGHT

TERMINATION

This agreement is not assignable and may be terminated by either party on ________

days’ written notice to the other. ________ [If appropriate, add: On termination, principal

shall have the right, for a period not to exceed ________ months following the date of

termination, to: (1) use storage facilities located on consignee’s premises at

________[address]; (2) replenish ________[his or her or its] stock of merchandise in

such facilities; (3) sell and deliver ________[his or her or its] merchandise from such

premises; and (4) remove all ________[his or her or its] merchandise from the facilities

during such period; provided, however, that principal shall pay a rental of $________ per

month for the period such facilities are so used.]

SECTION NINE

GOVERNING LAW

It is agreed that this agreement shall be governed by, construed, and enforced in

accordance with the laws of the State of ________.

SECTION TEN

NO WAIVER

The failure of either party to this agreement to insist on the performance of any of the

terms and conditions of this agreement, or the waiver of any breach of any of the terms

and conditions of this agreement, shall not be construed as waiving any terms and

conditions, but such terms and conditions shall continue and remain in full force and

effect as if no forbearance or waiver had occurred.

SECTION ELEVEN

ARBITRATION OF DISPUTES

All disputes, claims, and questions regarding the rights and obligations of the parties

under the terms of this agreement are subject to arbitration. Either party may make a

demand for arbitration by filing such demand in writing with the other party within

________ days after the dispute first arises. Subsequently, arbitration shall be conducted

by ________[set forth terms of arbitration, for example: three arbitrators acting under the

rules of commercial arbitration of the American Arbitration Association].

SECTION TWELVE

ATTORNEY FEES

In the event that any action is filed in relation to this agreement, the unsuccessful party

in the action shall pay to the successful party, in addition to all the sums that either party

may be called on to pay, a reasonable sum for the successful party’s attorney fees.

SECTION THIRTEEN

EFFECT OF PARTIAL INVALIDITY

The invalidity of any part of this agreement will not and shall not be deemed to affect

the validity of any other part. In the event that any provision of this agreement is held to

be invalid, the parties agree that the remaining provisions shall be deemed to be in full

force and effect as if they had been executed by both parties subsequent to the

expungement of the invalid provision.

SECTION FOURTEEN

ENTIRE AGREEMENT

This agreement shall constitute the entire agreement between the parties. Any prior

understanding or representation of any kind preceding the date of this agreement shall not

be binding on either party except to the extent incorporated in this agreement.

SECTION FIFTEEN

MODIFICATION OF AGREEMENT

Any modification of this agreement or additional obligation assumed by either party in

connection with this agreement shall be binding only if evidenced in a writing signed by

each party or an authorized representative of each party.

SECTION SIXTEEN

PARAGRAPH HEADINGS

The titles to the paragraphs of this agreement are solely for the convenience of the

parties and shall not be used to explain, modify, simplify, or aid in the interpretation of

the provisions of this agreement.

SECTION SEVENTEEN

COUNTERPARTS

This agreement may be executed in any number of counterparts, each of which shall be

deemed to be an original, but all of which together shall constitute but one and the same

instrument.

In witness of the above, each party to this agreement has caused it to be executed at

________[place of execution] on the date indicated below.

[Signatures and date(s) of signing]