Clothing Consignment Contract Template for Indonesia

A Clothing Consignment Contract is a specialized commercial agreement that governs the relationship between clothing owners and retail establishments in Indonesia's fashion industry. Under this arrangement, you retain ownership of your clothing merchandise while allowing a retailer to display and sell items on your behalf, with payment occurring only after successful sales to end customers.

When do you need this document?

You need a Clothing Consignment Contract when establishing partnerships with boutiques, department stores, or fashion retailers who will sell your clothing without purchasing inventory upfront. Fashion designers often use these agreements when launching new collections through established retail channels, while clothing manufacturers rely on consignment to expand market reach without requiring retailers to invest in unsold inventory. Independent fashion brands frequently utilize consignment arrangements to access premium retail locations that might otherwise be financially prohibitive. Additionally, you'll need this contract when transitioning from wholesale to consignment models or when establishing seasonal partnerships with specialty stores.

Key legal considerations

Your contract must clearly define commission rates, typically ranging from 30-60% depending on the retailer's location and services provided. Payment terms require careful structuring, as Indonesian commercial law mandates specific settlement periods and payment methods. The agreement should address inventory management responsibilities, including storage, display standards, and security measures for consigned goods. Risk allocation clauses are essential, determining liability for theft, damage, or loss while goods remain in the retailer's possession. You must also include termination provisions that specify how unsold inventory will be returned and any associated costs. Price modification clauses should address markdown policies and seasonal adjustments, while ensuring compliance with consumer protection laws regarding pricing transparency.

Legal requirements in Indonesia

Under the Indonesian Civil Code (KUHPerdata), consignment contracts must comply with general contract formation principles, including offer, acceptance, and consideration. Law No. 7 of 2014 on Trade requires proper business registration for both parties and adherence to retail licensing requirements. Your contract must align with Law No. 8 of 1999 on Consumer Protection, ensuring product quality standards and transparent pricing practices. Government Regulation No. 24 of 2018 mandates that retail operations comply with Online Single Submission (OSS) system requirements for business licensing. The agreement should reference Law No. 11 of 2020 on Job Creation (Omnibus Law) provisions affecting business operations and licensing procedures. Additionally, Minister of Trade Regulation No. 68 of 2018 governs retail business practices that may impact your consignment arrangement, particularly regarding product labeling and consumer information requirements.