Consignment Agreement for Indonesia

Consignment Agreement Template for Indonesia

A comprehensive legal document governed by Indonesian law that establishes a consignment arrangement between a product owner (consignor) and a seller (consignee). This agreement outlines the terms and conditions under which the consignee will sell products on behalf of the consignor while maintaining the consignor's ownership until sale. The document incorporates provisions compliant with Indonesian Civil Code (KUHPerdata) and Commercial Code (KUHD), addressing key aspects such as product handling, commission structures, reporting requirements, and risk allocation. It provides a framework for inventory management, sales reporting, and financial settlements while ensuring compliance with local commercial regulations.

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What is a Consignment Agreement?

The Consignment Agreement is a crucial document for businesses operating in Indonesia's retail and distribution sectors. It is particularly useful when a product owner wants to place their goods with a retailer or dealer for sale without transferring ownership until the actual sale occurs. This arrangement, governed by Indonesian law including the Civil Code (KUHPerdata) and Commercial Code (KUHD), provides flexibility for both parties while maintaining clear legal protections. The agreement typically details inventory management, commission structures, reporting requirements, and risk allocation. It's commonly used in various sectors from retail to industrial goods, and must comply with Indonesian regulations regarding trade partnerships and commercial transactions. The document serves as a comprehensive framework for managing the consignment relationship, including handling of goods, sales reporting, financial settlements, and dispute resolution procedures.

What sections should be included in a Consignment Agreement?

1. Parties: Identifies and provides full details of the consignor and consignee, including their legal status and addresses

2. Background: Sets out the context of the agreement and brief description of the business relationship

3. Definitions: Defines key terms used throughout the agreement

4. Appointment and Scope: Establishes the consignment relationship and defines its scope

5. Delivery and Receipt of Goods: Details the process for delivery, inspection, and acceptance of consigned goods

6. Title and Risk: Clarifies that title remains with consignor while goods are in consignee's possession

7. Pricing and Commission: Specifies the pricing structure, commission rates, and payment terms

8. Responsibilities of Consignor: Lists all obligations and duties of the consignor

9. Responsibilities of Consignee: Details all obligations and duties of the consignee, including storage and care of goods

10. Reporting and Accounting: Outlines requirements for sales reporting, inventory management, and financial accounting

11. Term and Termination: Specifies duration of agreement and circumstances for termination

12. Return of Unsold Goods: Procedures for returning unsold merchandise

13. General Provisions: Standard legal clauses including governing law, notices, and amendment procedures

What sections are optional to include in a Consignment Agreement?

1. Insurance: Required when specific insurance arrangements need to be detailed beyond basic coverage

2. Marketing and Display: Include when there are specific requirements for how goods should be marketed or displayed

3. Minimum Performance Requirements: Add when setting specific sales targets or performance metrics

4. Exclusivity: Include when either party requires territorial or product exclusivity

5. Storage Requirements: Add when goods require special storage conditions or handling

6. Sub-consignment Rights: Include when consignee may be allowed to engage sub-consignees

7. Intellectual Property: Required when branding or IP rights need protection

8. Data Protection: Include when personal data processing is involved in the consignment arrangement

What schedules should be included in a Consignment Agreement?

1. Schedule A - Products List: Detailed list of consigned products with descriptions and pricing

2. Schedule B - Commission Structure: Detailed breakdown of commission rates and calculation methods

3. Schedule C - Operating Procedures: Specific procedures for ordering, delivery, returns, and reporting

4. Schedule D - Territory Definition: Definition of geographical area covered by the agreement

5. Schedule E - Service Level Requirements: Specific performance metrics and service standards

6. Appendix 1 - Reporting Templates: Standard forms for inventory and sales reporting

7. Appendix 2 - Product Handling Guidelines: Specific instructions for product care and handling

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Indonesia

Publisher

Genie AI

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Retail

Fashion and Apparel

Consumer Goods

Electronics

Luxury Goods

Automotive Parts

Furniture and Home Decor

Books and Publications

Art and Collectibles

Agricultural Products

Handicrafts

Industrial Equipment

Relevant Teams

Legal

Commercial

Sales

Operations

Finance

Supply Chain

Procurement

Compliance

Risk Management

Retail Operations

Inventory Management

Business Development

Contract Administration

Relevant Roles

Commercial Director

Sales Manager

Retail Operations Manager

Legal Counsel

Contract Manager

Business Development Manager

Supply Chain Manager

Finance Manager

Inventory Control Manager

Procurement Manager

Compliance Officer

Risk Manager

Store Manager

Category Manager

Warehouse Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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