Consignment Stock Agreement Template for Switzerland

A Consignment Stock Agreement is a specialized commercial contract under Swiss law that allows suppliers to place their goods at customer premises while retaining legal ownership until the goods are sold. This arrangement, governed by the Swiss Code of Obligations, provides businesses with flexible inventory management solutions while maintaining clear legal boundaries between consignor and consignee responsibilities.

When do you need this document?

You need a Consignment Stock Agreement when establishing arrangements where goods are stored at customer locations but ownership remains with the supplier until sale. This is particularly common in retail partnerships where manufacturers place products in stores, pharmaceutical companies supplying hospitals with medical equipment, or automotive suppliers maintaining parts inventory at dealerships. The agreement is essential for high-value goods, seasonal merchandise, or when testing new markets without transferring ownership risks. It's also crucial for international trade relationships where Swiss companies want to maintain control over inventory while providing local access to distributors or retailers.

Key legal considerations

Under Swiss law, the agreement must clearly define ownership rights, risk allocation, and title transfer mechanisms to comply with property law requirements in the Swiss Civil Code. Storage and handling obligations must be precisely outlined, including insurance responsibilities, security measures, and quality control procedures. Payment terms require careful structuring to address VAT implications under the Federal Act on Value Added Tax, particularly regarding timing of tax liability and invoicing requirements. The agreement should address inventory management procedures, including regular stock counts, reporting obligations, and procedures for handling damaged or obsolete goods. Risk allocation provisions must clearly specify responsibility for loss, damage, or theft during the consignment period, while ensuring compliance with Swiss commercial law standards.

Legal requirements in Switzerland

Swiss law requires consignment arrangements to comply with specific provisions of the Code of Obligations, particularly regarding contract formation, performance obligations, and sales law provisions. The agreement must address accounting treatment requirements under the Federal Act on Accounting and Financial Reporting, including proper inventory valuation and recognition procedures for both parties. If commercial agents are involved, compliance with Articles 418a-418v of the Code of Obligations is mandatory, covering agency relationship rights and obligations. VAT considerations must align with Swiss tax law, including proper documentation of stock transfers and sale transactions. The agreement should incorporate appropriate dispute resolution mechanisms, typically arbitration clauses compliant with Swiss arbitration law, and must ensure that termination procedures comply with Swiss commercial law requirements for contract dissolution and goods return procedures.