Consignor Agreement Template for England and Wales

A Consignor Agreement is a crucial commercial contract that governs the relationship between a consignor who owns goods and a consignee who sells those goods on the consignor's behalf. Under England and Wales law, this agreement ensures compliance with statutory requirements while protecting the interests of both parties in what is essentially a bailment arrangement with agency characteristics.

When do you need this document?

You need a Consignor Agreement whenever you plan to place your goods with another party for sale while retaining ownership until the point of sale. This arrangement is common in art galleries displaying artwork for artists, retail stores selling products from multiple suppliers, antique dealers handling estate items, and manufacturers distributing through independent retailers. The agreement becomes essential when establishing clear terms for commission payments, defining responsibilities for storage and handling, and allocating risks such as damage, theft, or loss during the consignment period.

Key legal considerations

The agreement must clearly define the relationship between parties to avoid confusion with outright sale or other commercial arrangements. Critical clauses include the commission structure and payment terms, which determine how much the consignee retains from each sale and when payments are due to the consignor. Risk allocation provisions specify who bears responsibility for damage, loss, or theft of consigned goods, often requiring appropriate insurance coverage. The agreement should address the consignee's duty of care in handling and storing goods, reflecting bailment law principles. Termination clauses must specify how the arrangement ends and procedures for returning unsold goods. Additionally, the agreement should clarify whether the consignee has authority to set prices or negotiate terms with buyers, establishing the scope of any agency relationship.

Legal requirements in England and Wales

Under the Sale of Goods Act 1979, the agreement must clearly distinguish between consignment and sale, ensuring that title remains with the consignor until goods are sold to end customers. The Supply of Goods and Services Act 1982 governs service aspects of the arrangement, including implied terms about the standard of care and skill in handling consigned goods. If the arrangement involves consumer transactions, the Consumer Rights Act 2015 may apply, requiring additional consumer protections. The Contracts (Rights of Third Parties) Act 1999 becomes relevant in complex arrangements involving multiple parties or where third parties may acquire rights under the agreement. Common law bailment principles impose duties on the consignee to take reasonable care of the goods and return them upon demand. Agency law may also apply if the consignee has authority to act on the consignor's behalf in sales transactions, creating fiduciary duties and affecting liability for the consignee's actions.