Standard Consignment Agreement Template for Australia

A Standard Consignment Agreement is a crucial legal document that governs the relationship between a consignor (goods owner) and consignee (seller) in Australia. Under this arrangement, you retain ownership of your goods while allowing another party to sell them on your behalf, with ownership only transferring upon final sale to the end customer.

When do you need this document?

You'll need a Standard Consignment Agreement when expanding your sales channels through retail partners, art galleries, or specialty stores without requiring them to purchase inventory upfront. This document is essential for manufacturers supplying products to retailers, artists placing works in galleries, or wholesalers distributing goods through multiple outlets. The agreement becomes particularly important when dealing with high-value items, seasonal products, or when testing new markets where traditional wholesale arrangements may be too risky for potential sales partners.

Key legal considerations

Your consignment agreement must clearly define the relationship between parties to avoid disputes over ownership, liability, and payment terms. Critical clauses include commission structures, minimum sales requirements, and procedures for handling damaged or unsold goods. You should address insurance responsibilities, as goods remain your property until sold, meaning you typically bear the risk of loss or damage. The agreement must specify reporting obligations, payment terms for sales proceeds, and termination procedures. Consider including provisions for goods rotation, pricing guidelines, and territorial restrictions to protect your brand and market position.

Legal requirements in Australia

Under Australian law, your consignment agreement must comply with the Competition and Consumer Act 2010, which governs business practices and may apply consumer protection provisions to your arrangement. The Personal Property Securities Act 2009 requires careful consideration of security interests in consigned goods, particularly regarding registration requirements and priority disputes. State-based Goods Acts govern the sale and transfer of goods, affecting how ownership passes and what warranties apply. Your agreement should address Australian Consumer Law requirements, especially if consigned goods ultimately reach consumers, as these protections may extend through the supply chain. Additionally, ensure compliance with relevant industry-specific regulations and consider tax implications under GST legislation, as consignment arrangements may affect how and when GST applies to transactions.