Consignment Agreement Template for the UK
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What is a Consignment Agreement?
A consignment agreement lets one party (the consignor) place goods with another party (the consignee) to sell on their behalf. The consignee displays and sells the stock but never owns it, acting like a sales agent and earning commission on each sale. This arrangement is common in retail, art galleries and vintage shops across England and Wales.
The agreement sets out commission rates, payment terms and who bears the risk if goods are damaged. The consignor keeps legal ownership until each sale completes, and the consignee must handle the stock with care and report sales accurately. Both parties need clear records for VAT and accounting under the Value Added Tax Act 1994. You can read the sample wording below, then draft a version tailored to your own terms with GenieAI.
Sample clauses: standard wording in a UK consignment agreement
5. Title, Risk and Insurance
5.1 Legal and beneficial title to each Consigned Item remains with the Consignor at all times until that item is sold to a customer in accordance with this Agreement, and title then passes directly from the Consignor to the customer.
5.2 Risk in each Consigned Item passes to the Consignee on delivery to the [Premises] and remains with the Consignee until the item is sold or returned to the Consignor, and the Consignee is liable for loss of or damage to the item while at its risk.
5.3 The Consignee shall keep the Consigned Items insured for their full [retail value / agreed replacement value] against loss, theft and damage with a reputable insurer, and shall produce evidence of that cover on request.
5.4 The Consignee shall store the Consigned Items separately from its own stock, clearly marked as the property of the Consignor, and shall not pledge, charge or grant any security over them.
6. Commission, Proceeds and Payment
6.1 The Consignee is entitled to commission of [__]% of the net sale price (excluding VAT) of each Consigned Item sold, and no other fee, mark-up or deduction may be taken without the Consignor's prior written consent.
6.2 The Consignee shall hold all sale proceeds on trust for the Consignor in a [separate designated / client] account pending payment, and shall not treat those proceeds as its own funds.
6.3 Within [10] Business Days of the end of each [calendar month] the Consignee shall deliver a statement of items sold, sale prices and commission, and shall pay the balance due to the Consignor within a further [5] Business Days.
6.4 Each party shall keep accurate records of the Consigned Items and sales sufficient to meet its obligations under the Value Added Tax Act 1994, and shall permit the other to inspect those records on [5] Business Days' written notice.
Illustrative extract showing typical drafting under the law of England and Wales. Documents generated with GenieAI are tailored to your rules, standards and context.
Frequently Asked Questions
When should you use a Consignment Agreement?
Use a consignment agreement when you want to sell products through a third party without transferring ownership until the actual sale happens. It suits high-value stock like artwork, antiques or designer clothing where you need to keep control while reaching more buyers through established retailers or galleries, whether in-store or through an online shop.
This arrangement matters most for unique or valuable merchandise that needs specific handling, display conditions or expert selling knowledge. It protects both parties under English commercial law, helping prevent disputes over damaged goods, sales tracking and commission structures. It works well for seasonal ranges, test-marketing new products, or entering a new retail market with minimal risk.
What are the different types of Consignment Agreement?
- Consignment Sales Agreement: Basic framework for general merchandise, covering essential terms and commission structures
- Retail Consignment Contract: Tailored for high-street retail operations with specific display and inventory management terms
- Equipment Consignment Agreement: Specialized for industrial or technical equipment with maintenance and liability provisions
- Consignment Store Agreement: Comprehensive version for dedicated consignment shops, including store operations and multiple consignor management
- Consignor Agreement: Focuses on consignor rights and obligations, ideal for suppliers working with multiple retailers
Who should typically use a Consignment Agreement?
- Artists and Creators: Supply original artwork, crafts, or unique items to galleries while maintaining ownership rights until sale
- Retail Shop Owners: Display and sell consigned goods, manage inventory, and handle customer transactions for a commission
- Vintage Dealers: Place high-value collectibles or antiques with specialist retailers while controlling pricing
- Equipment Manufacturers: Supply specialized machinery to dealers for demonstration and sale without transfer of ownership
- Solicitors: Draft and review agreements to ensure compliance with UK commercial law and protect both parties' interests
- Accountants: Track sales, commissions, and VAT obligations for both consignors and consignees
How do you write a consignment agreement in 2026?
- Party Details: Gather full legal names, addresses, and registration numbers of both consignor and consignee
- Item Description: Create detailed inventory list with conditions, values, and unique identifiers of consigned goods
- Commission Structure: Determine exact percentage splits, payment terms, and minimum sale prices
- Duration Terms: Set clear timeframes for the consignment period and any renewal options
- Insurance Coverage: Confirm who provides insurance and document existing item conditions
- Display Requirements: Specify any special handling, storage, or presentation needs
- Return Protocol: Define procedures for unsold items and notice periods
- Payment Methods: Establish payment schedules and acceptable forms of payment
What should be included in a Consignment Agreement?
- Party Identification: Full legal names, addresses, and business details of consignor and consignee
- Goods Description: Precise inventory list with values, conditions, and unique identifiers
- Commission Terms: Clear payment structure, rates, and timing of settlements
- Title Retention: Explicit statement that ownership remains with consignor until sale
- Risk Allocation: Responsibilities for loss, damage, and insurance requirements
- Duration: Agreement term, renewal options, and termination conditions
- Sales Process: Pricing authority, display requirements, and reporting obligations
- Governing Law: Explicit reference to English law jurisdiction and dispute resolution
- Execution Block: Signature spaces with dates and witness provisions
What's the difference between a Consignment Agreement and an Agency Agreement?
A consignment agreement differs from an agency agreement, even though both involve one party selling goods on behalf of another. The table below sets out the key distinctions under the law of England and Wales.
| Point of difference | Consignment agreement | Agency agreement |
|---|---|---|
| Ownership structure | Consignor retains full ownership until the final sale | Principal may transfer ownership to the agent |
| Risk allocation | Most risk typically sits with the consignor | Risk is often shared between the parties |
| Payment terms | Focused on commission per sale | May include fixed fees plus commission |
| Legal authority | Consignee can sell only at agreed prices, with limited authority | Agent usually has broader power to negotiate and bind the principal |
| Inventory control | Strict stock tracking and return rights | More flexibility in handling goods |
If you need a broader commercial framework, see the related service agreement. You can read and compare both to decide which fits your deal.
If the goods you consign involve any customer data (for example an online shop passing on buyer details), check the terms sit alongside your privacy policy so both documents handle personal data consistently under UK GDPR.
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About the Consignment Agreement
- Party Details: Gather full legal names, addresses, and registration numbers of both consignor and consignee
- Item Description: Create detailed inventory list with conditions, values, and unique identifiers of consigned goods
- Commission Structure: Determine exact percentage splits, payment terms, and minimum sale prices
- Duration Terms: Set clear timeframes for the consignment period and any renewal options
- Insurance Coverage: Confirm who provides insurance and document existing item conditions
- Display Requirements: Specify any special handling, storage, or presentation needs
- Return Protocol: Define procedures for unsold items and notice periods
- Payment Methods: Establish payment schedules and acceptable forms of payment
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