Consignment Sales Agreement for Nigeria

Consignment Sales Agreement Template for Nigeria

This document establishes a consignment sales arrangement under Nigerian law, where one party (consignor) provides goods to another party (consignee) for sale while retaining ownership until the goods are sold. It comprehensively covers delivery terms, pricing structures, commission arrangements, reporting requirements, and risk allocation. The agreement complies with Nigerian commercial law requirements, including the Sales of Goods Act and Contract Law Act, while addressing specific considerations for consignment relationships such as inventory management, sales reporting, and payment terms. It includes provisions for both parties' obligations, handling of unsold goods, and termination conditions.

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What is a Consignment Sales Agreement?

The Consignment Sales Agreement is essential for businesses operating in Nigeria that wish to establish a consignment relationship for the sale of goods. This arrangement allows suppliers (consignors) to place their products with retailers or distributors (consignees) while maintaining ownership until final sale. The document is particularly relevant in the Nigerian market where consignment arrangements are common in retail, distribution, and various commercial sectors. It includes crucial provisions required under Nigerian law, addressing key aspects such as delivery terms, pricing, commission structures, inventory management, and risk allocation. The agreement ensures compliance with Nigerian commercial legislation while protecting both parties' interests in the consignment relationship. This type of agreement is commonly used when suppliers want to expand their market presence without requiring retailers to purchase inventory upfront, or when testing new markets or products.

What sections should be included in a Consignment Sales Agreement?

1. Parties: Identifies and provides full details of the consignor and consignee, including business registration details

2. Background: Explains the context of the agreement and the parties' intention to enter into a consignment arrangement

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 until sale, and addresses risk allocation

7. Pricing and Commission: Specifies the pricing structure for consigned goods and consignee's commission

8. Payment Terms: Details the payment arrangements, including timing and method of payment

9. Obligations of Consignor: Lists the consignor's responsibilities including product quality, documentation, etc.

10. Obligations of Consignee: Outlines the consignee's duties including storage, sales efforts, reporting, etc.

11. Reporting and Records: Specifies requirements for inventory tracking, sales reporting, and record-keeping

12. Returns and Unsold Goods: Procedures for handling returns and disposition of unsold merchandise

13. Term and Termination: Specifies agreement duration and termination provisions

14. General Provisions: Standard clauses including governing law, notices, amendments, etc.

What sections are optional to include in a Consignment Sales Agreement?

1. Insurance: Required when specific insurance arrangements need to be detailed, particularly for high-value goods

2. Marketing and Display: Include when specific requirements exist for product marketing and store display

3. Exclusivity: Used when granting exclusive rights to sell in certain territories or to certain customers

4. Minimum Performance Requirements: Include when setting specific sales targets or performance metrics

5. Storage and Handling Requirements: Necessary for goods requiring special storage conditions or handling

6. Product Training: Include when consignee staff require specific product knowledge training

7. Intellectual Property: Required when dealing with branded goods or use of trademarks

8. Data Protection: Include when personal customer data will be collected and shared

What schedules should be included in a Consignment Sales Agreement?

1. Schedule 1 - Product List: Detailed list of consigned products including descriptions and pricing

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

3. Schedule 3 - Territory Definition: Description of geographical areas or markets covered by the agreement

4. Schedule 4 - Reporting Templates: Standard forms for inventory and sales reporting

5. Schedule 5 - Storage Requirements: Specific requirements for product storage and handling

6. Appendix A - Return Procedures: Detailed procedures for handling product returns and claims

7. Appendix B - Quality Standards: Product quality standards and inspection criteria

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

Nigeria

Publisher

Genie AI

Document Type

Sale Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Retail

Consumer Goods

Fashion and Apparel

Electronics

Automotive

Luxury Goods

Furniture and Home Decor

Sporting Goods

Books and Stationery

Agricultural Products

Industrial Equipment

Pharmaceuticals

Jewelry and Accessories

Relevant Teams

Legal

Commercial

Sales

Operations

Finance

Supply Chain

Procurement

Compliance

Business Development

Distribution

Retail Operations

Relevant Roles

Commercial Director

Sales Manager

Operations Manager

Legal Counsel

Contract Manager

Business Development Manager

Retail Manager

Supply Chain Manager

Finance Manager

Inventory Manager

Procurement Manager

Distribution Manager

Compliance Officer

Chief Financial Officer

Managing Director

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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