Consignment Sales Agreement Template for New Zealand

A Consignment Sales Agreement is a commercial contract where you place goods with a retailer or seller (consignee) who sells them on your behalf while you retain ownership until sale. Under New Zealand law, this arrangement creates a unique legal relationship that requires careful documentation to protect both parties' interests and ensure compliance with commercial legislation.

When do you need this document?

You need a Consignment Sales Agreement when placing inventory with retailers without transferring ownership, such as when a jewellery manufacturer places pieces in boutique stores, an artist places artwork in galleries, or a craftsperson places handmade goods in gift shops. This agreement is essential for high-value or unique products where traditional wholesale arrangements aren't suitable, when testing new markets without establishing retail presence, or when retailers want to offer diverse inventory without upfront purchase costs. The document becomes crucial when dealing with perishable goods requiring specific handling, luxury items needing specialised presentation, or seasonal products with time-sensitive sales periods.

Key legal considerations

Your agreement must clearly define the consignment relationship to avoid disputes over ownership, liability, and payment obligations. Critical clauses include commission structures and payment terms, specifying when and how you'll be paid after sales occur. You need comprehensive insurance and liability provisions addressing who bears responsibility for damage, theft, or loss while goods remain in the consignee's possession. The agreement should establish clear reporting requirements, including regular sales reports and inventory updates, while defining the consignee's duties regarding product care, display, and marketing efforts. Include termination clauses covering notice periods, return of unsold goods, and final payment settlements. Consider including exclusivity terms if you're granting territorial or product-specific selling rights, and establish clear procedures for pricing, markdowns, and promotional activities.

Legal requirements in New Zealand

Under the Contract and Commercial Law Act 2017, your consignment agreement must meet standard contract formation requirements including offer, acceptance, and consideration. The Personal Property Securities Act 1999 is particularly important as consignment arrangements may create security interests requiring registration on the Personal Property Securities Register to protect your ownership rights against third-party claims. The Fair Trading Act 1986 applies to representations made about products, requiring accuracy in marketing and sales descriptions. If goods will be sold to consumers, the Consumer Guarantees Act 1993 affects warranty obligations and quality standards. Your agreement must address GST obligations under the Goods and Services Tax Act 1985, clearly establishing which party handles tax collection and remittance. Consider privacy law compliance if the agreement involves sharing customer information, and ensure any international consignment arrangements comply with import/export regulations and currency transaction reporting requirements.