Equipment Consignment Agreement Template for Switzerland

An Equipment Consignment Agreement is a specialized contract that allows you to place equipment with a third party for sale while retaining ownership until the equipment is actually sold. Under Swiss law, this arrangement is governed primarily by the Swiss Code of Obligations (OR), which provides the legal framework for such commercial relationships. This agreement is particularly valuable for manufacturers, distributors, and equipment owners who want to expand their market reach without requiring significant upfront capital from potential sellers.

When do you need this document?

You need an Equipment Consignment Agreement when placing machinery, industrial equipment, or specialized tools with dealers, retailers, or distributors for sale. This arrangement is common in Switzerland's manufacturing sector, where equipment suppliers work with local dealers to reach end customers. The agreement is essential when you want to maintain ownership of valuable equipment until it's sold, ensuring you retain control over pricing and can reclaim unsold items. It's also crucial when working with new business partners where you want to minimize risk while testing market demand for your equipment in different regions or sectors.

Key legal considerations

Several critical legal aspects require careful attention in your Equipment Consignment Agreement. Title retention clauses must clearly establish that you remain the legal owner until payment is received, protecting your interests if the consignee faces financial difficulties. Risk allocation provisions should specify who bears responsibility for damage, theft, or loss during the consignment period. Commission structures and payment terms need precise definition to avoid disputes, including when commissions are earned and payment deadlines. Insurance requirements should be clearly outlined, specifying minimum coverage levels and which party maintains policies. The agreement must also address equipment maintenance responsibilities, storage standards, and the consignee's authority to negotiate prices or terms with potential buyers.

Legal requirements in Switzerland

Swiss law imposes specific requirements on Equipment Consignment Agreements under the Code of Obligations. Articles 394-406 regarding agency contracts provide the foundational framework for consignment relationships, while Articles 184-236 on sales contracts govern the eventual sale transactions. The Federal Product Safety Act (PrSG) requires compliance with safety standards for equipment, making both parties potentially liable for non-compliant products. Under the Federal Act on Product Liability (PrHG), clear liability allocation is essential to determine responsibility for defective equipment claims. The agreement must comply with Swiss Civil Code provisions regarding ownership and possession rights. For international consignments, the Federal Act on International Private Law (IPRG) may apply, requiring specific jurisdiction and governing law clauses. Swiss commercial law also mandates clear record-keeping requirements and may require registration of certain high-value equipment consignments.