To consign means to transfer or deliver goods or merchandise to someone else’s care for sale, storage, or shipment. The party transferring the goods is known as the consignor, while the recipient is the consignee. Consignment arrangements are common in retail, where manufacturers or suppliers entrust their products to retailers for sale on a commission basis. This allows the consignor to reach a wider market without bearing the full risk of unsold inventory, while the consignee benefits from access to a broader range of products without the upfront cost of purchasing them outright. The consignee typically earns a percentage of the sales proceeds as compensation for selling the consigned goods.
v. 1) to deliver goods to a merchant to sell on behalf of the party delivering the items, as distinguished from transferring to a retailer at a wholesale price for re-sale. Example: leaving one’s auto at a dealer to sell and split the profit. 2) to deliver to a carrier to be taken to an agent of the sender. 3) when a debtor has belongings but no money to pay his/her creditors and deposits his/her goods with a trustee who will sell them to raise money to pay the owner’s debts and creditors. This is done by agreement between a debtor and his/her creditors or by order of a bankruptcy judge.
Consign refers to the act of transferring goods or property to another person or entity for the purpose of sale or safekeeping. It involves a consignor (the person transferring the goods) and a consignee (the person receiving the goods). The consignor retains ownership of the goods until they are sold, and the consignee is responsible for selling the goods and returning the proceeds to the consignor, minus any agreed-upon fees or commissions. Consignment agreements are typically governed by contract law.
A Consignment is a business arrangement where a consignor (seller) entrusts goods to a consignee (seller) to sell on their behalf.
Yes, a consignment agreement is a legally binding contract between the consignor and consignee.
The key terms of a consignment agreement include the description of the goods, the commission rate, the duration of the agreement, and the responsibilities of both parties.
The consignor retains ownership of the goods until they are sold by the consignee.
The consignee is responsible for any damage or loss that occurs while the goods are in their possession.
Yes, a consignor can terminate a consignment agreement early, but they may be required to pay a termination fee or other penalties.
If the goods do not sell within the agreed-upon timeframe, the consignor may choose to retrieve the goods or negotiate a new agreement with the consignee.
No, a consignee cannot sell the goods for less than the agreed-upon price without the consignor’s consent.
The consignor is responsible for paying any applicable taxes on the sale of the goods, while the consignee is responsible for collecting and remitting the taxes to the appropriate authorities.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 6th April 2024.
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