CONSIGNMENT AGREEMENT: Example of a form that may be used to document an agreement for a consignee to sell and distribute a manufacturer’s merchandise

CONSIGNMENT AGREEMENT

Agreement made, effective as of ________[date], by and between ________[name], of ________[address], City of ________, State of ________, subsequently referred to as principal, and ________[name], of ________[street address], ________[city],], ________[state], subsequently referred to as consignee.

RECITALS

The parties recite and declare:

Principal conducts a manufacturing business described as follows: ________.

Principal desires to arrange for the sale and distribution of its merchandise throughout ________ [territory].

Consignee has agreed to undertake the marketing of principal’s merchandise on the terms set forth in this agreement.

In consideration of the above recitals, the terms and covenants of this agreement, and other valuable consideration, the receipt of which is acknowledged, the parties agree as follows:

SECTION ONE

EXCLUSIVE APPOINTMENT

Consignee shall have the exclusive right to sell and distribute principal’s merchandise throughout ________ [territory] during the term of this agreement.

SECTION TWO

DELIVERY OF MERCHANDISE

Principal shall deliver to consignee such quantity of its merchandise that consignee requires for sale from ________ [his or her or its] place of business at ________ [street address], ________ [city], ________ [county], ________ [state].

Principal shall pay all freight and shipping charges.

Consignee shall be responsible for any loss of or damage to merchandise while it is under ________ [his or her] control.

SECTION THREE

SALE OF MERCHANDISE

Consignee shall devote ________ [his or her] best efforts to the sale and distribution of principal’s merchandise throughout the territory referred to above.

All sales made by consignee shall be for cash. Credit sales may be made by consignee on written authority only, and on terms which principal may approve prior to such sales.

All sales prices shall be fixed by principal.

Consignee shall not sell principal’s merchandise at less than the authorised prices, which prices will be reflected in price schedules that will be furnished to consignee from time to time.

SECTION FOUR

MONTHLY STATEMENTS; COMPENSATION

Consignee shall furnish principal with monthly statements indicating all sales transactions during the preceding month and the extent of current inventory. Such statements shall be received by principal no later than the ________ day of each month.

With the monthly statement, consignee shall remit to principal all monies received by ________ [him or her] from the sale of goods, ________ [if appropriate, add: together with signed receipts or bills of lading for credit sales].

As soon as practicable after the ________ day of each month, principal shall render a written statement to consignee showing sales during the preceding month, and shall remit to consignee net commissions for such sales in accordance with the commission schedule set forth in Exhibit ________, which is attached to this agreement.

SECTION FIVE

MANAGEMENT OF CONSIGNEE’S BUSINESS

Consignee shall have entire charge of the management and operation of ________ [his or her] business; ________ [he or she] shall furnish all equipment and vehicles, and hire and pay the wages of all assistants and employees required for the operation of ________ [his or her] business.

Principal reserves no supervision or control over consignee in the facilities, employees, and methods to be used and employed by consignee in carrying out the purposes of this agreement, and shall in no event be responsible for negligence of consignee or consignee’s employees.

SECTION SIX

TITLE TO MERCHANDISE

Consigned merchandise shall remain the property of principal until sold in the regular course of business, except that consignee shall be responsible for all shortages of stock.

SECTION SEVEN

EMPLOYEE BENEFIT PAYMENTS

Consignee shall and does accept full and exclusive liability for the payment of any and all premiums, contributions, and taxes for workers’ compensation insurance, unemployment insurance, and for pensions, annuities, and retirement benefits, now or later imposed by or pursuant to federal and state laws, which are measured by the wages, salaries, or other remuneration paid to persons employed by consignee in connection with the performance of this agreement. Consignee shall indemnify principal against any and all liability for any premiums, taxes, or contributions respecting consignee’s employees that may be assessed against principal. Consignee shall enter into any agreement that has been or may later be prescribed by any federal or state governmental body or authority to effectuate the above-stated purposes.

SECTION EIGHT

TERMINATION

This agreement is not assignable and may be terminated by either party on ________ days’ written notice to the other. ________ [If appropriate, add: On termination, principal shall have the right, for a period not to exceed ________ months following the date of termination, to: (1) use storage facilities located on consignee’s premises at ________[address]; (2) replenish ________[his or her or its] stock of merchandise in such facilities; (3) sell and deliver ________[his or her or its] merchandise from such premises; and (4) remove all ________[his or her or its] merchandise from the facilities during such period; provided, however, that principal shall pay a rental of $________ per month for the period such facilities are so used.]

SECTION NINE

GOVERNING LAW

It is agreed that this agreement shall be governed by, construed, and enforced in accordance with the laws of the State of ________.

SECTION TEN

NO WAIVER

The failure of either party to this agreement to insist on the performance of any of the terms and conditions of this agreement, or the waiver of any breach of any of the terms and conditions of this agreement, shall not be construed as waiving any terms and conditions, but such terms and conditions shall continue and remain in full force and effect as if no forbearance or waiver had occurred.

SECTION ELEVEN

ARBITRATION OF DISPUTES

All disputes, claims, and questions regarding the rights and obligations of the parties under the terms of this agreement are subject to arbitration. Either party may make a demand for arbitration by filing such demand in writing with the other party within ________ days after the dispute first arises. Subsequently, arbitration shall be conducted by ________ [set forth terms of arbitration].

SECTION TWELVE

ATTORNEY FEES

In the event that any action is filed in relation to this agreement, the unsuccessful party in the action shall pay to the successful party, in addition to all the sums that either party may be called on to pay, a reasonable sum for the successful party’s attorney fees.

SECTION THIRTEEN

EFFECT OF PARTIAL INVALIDITY

The invalidity of any part of this agreement will not and shall not be deemed to affect the validity of any other part. In the event that any provision of this agreement is held to be invalid, the parties agree that the remaining provisions shall be deemed to be in full force and effect as if they had been executed by both parties subsequent to the expungement of the invalid provision.

SECTION FOURTEEN

ENTIRE AGREEMENT

This agreement shall constitute the entire agreement between the parties. Any prior understanding or representation of any kind preceding the date of this agreement shall not be binding on either party except to the extent incorporated in this agreement.

SECTION FIFTEEN

MODIFICATION OF AGREEMENT

Any modification of this agreement or additional obligation assumed by either party in connection with this agreement shall be binding only if evidenced in a writing signed by each party or an authorised representative of each party.

SECTION SIXTEEN

PARAGRAPH HEADINGS

The titles to the paragraphs of this agreement are solely for the convenience of the parties and shall not be used to explain, modify, simplify, or aid in the interpretation of the provisions of this agreement.

SECTION SEVENTEEN

COUNTERPARTS

This agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.

In witness of the above, each party to this agreement has caused it to be executed at ________ [place of execution] on the date indicated below.

[Signature]	[Date]

[Signature]	[Date]

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DISCLAIMER

The following form is provided by Lawoffice.com from West Legal Directory for informational purposes only and is intended to be used as a guide prior to consultation with an attorney familiar with your specific legal situation. Lawoffice.com is not engaged in rendering legal or other professional advice, and this form is not a substitute for the advice of an attorney. If you require legal advice, you should seek the services of an attorney. © 2000 Lawoffice.com. All rights reserved.

2005-02-17

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