Consignment Sales Agreement Template for England and Wales

A Consignment Sales Agreement is a commercial contract that allows you to place your goods with another party for sale without transferring ownership until the items are actually sold. Under England and Wales law, this arrangement creates a unique legal relationship where you retain title to your goods while the consignee acts as your agent or bailee to facilitate sales.

When do you need this document?

You need a Consignment Sales Agreement when you want to expand your sales channels without the upfront costs of establishing your own retail presence. This arrangement is particularly valuable for manufacturers looking to test new markets, artists seeking gallery representation, or wholesalers wanting to reach end consumers through established retailers. The agreement is also essential when you need to maintain cash flow while still accessing broader distribution networks, as payment typically occurs only after your goods are sold.

Key legal considerations

Several critical legal provisions must be addressed in your consignment agreement. Commission rates and payment terms require careful negotiation, as these directly impact your profitability and cash flow. Risk allocation clauses determine who bears responsibility for damaged, lost, or stolen goods during the consignment period. Title and ownership provisions must clearly establish that you retain ownership until sale, which is crucial for protecting your interests if the consignee faces financial difficulties. Reporting obligations should specify how and when the consignee must provide sales information and account for your inventory. Termination clauses need to address the return of unsold goods and final accounting procedures.

Legal requirements in England and Wales

Your Consignment Sales Agreement must comply with several key pieces of legislation. The Sale of Goods Act 1979 governs the actual sales transactions and implies certain terms about title, quality, and fitness for purpose that cannot be excluded when selling to consumers. If your arrangement involves any agency relationship, the Commercial Agents Regulations 1993 may apply, potentially granting the consignee specific rights including compensation upon termination. The Consumer Rights Act 2015 provides mandatory protections when end customers are consumers, affecting warranty and return obligations. The Unfair Contract Terms Act 1977 limits your ability to exclude liability for certain losses, particularly when dealing with consumers or in business-to-business relationships where terms are unreasonable. Additionally, if your goods will be sold to consumers, various consumer protection regulations may apply, affecting pricing, returns, and advertising practices.