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A Consignment Agreement lets a business owner (consignor) place their goods with another party (consignee) to sell them without transferring ownership. Under Indian contract law, the consignee acts as an agent, selling items on behalf of the consignor while earning a commission on each sale.

These agreements protect both parties by clearly outlining payment terms, handling of unsold items, and liability for damage or loss. Common in retail, art galleries, and fashion boutiques across India, they help small businesses expand their reach without the upfront costs of buying inventory. The Indian Sale of Goods Act 1930 governs key aspects like risk transfer and payment obligations in these arrangements.

Use a Consignment Agreement when you want to sell products through another business without giving up ownership of your inventory. This arrangement works perfectly for artisans placing handcrafted items in retail stores, fashion designers testing new markets, or manufacturers expanding distribution without heavy upfront costs.

The agreement becomes essential when dealing with high-value merchandise or seasonal goods in India's retail sector. It protects both parties by documenting commission rates, sales terms, and responsibilities for inventory care. Businesses entering new markets or launching product lines often choose this model to minimize risk while leveraging established retail locations and customer bases.

• Consignment Contract: Basic agreement suitable for most business relationships, covering essential terms and conditions
• Consignment Stock Agreement: Focused on inventory management and storage terms, popular in wholesale and manufacturing
• Consignment Contract For Artists: Specialized for artwork sales through galleries, including intellectual property protections
• Consignment Store Agreement: Retail-focused version with detailed pricing and display requirements
• Consignment Inventory Contract: Comprehensive version with detailed inventory tracking and reporting procedures

• Consignors (Product Owners): Manufacturers, artists, designers, or wholesalers who own goods and want to sell through other businesses while maintaining ownership
• Consignees (Sellers): Retail stores, galleries, boutiques, or showrooms that display and sell consigned items for a commission
• Legal Advisors: Lawyers who draft and review agreements to ensure compliance with Indian contract law and protect both parties' interests
• Business Managers: Handle day-to-day operations, inventory tracking, and sales reporting between parties
• Accountants: Track sales, commissions, and tax implications under Indian financial regulations

• Basic Details: Gather complete business information for both consignor and consignee, including GST numbers and addresses
• Inventory Specifics: List all items with descriptions, quantities, and agreed-upon pricing structure
• Commission Terms: Define commission rates, payment schedules, and methods of fund transfer
• Duration Planning: Decide contract length and renewal terms that suit your business cycle
• Risk Management: Outline insurance requirements, damage policies, and return procedures
• Document Generation: Use our platform to create a legally-sound agreement that includes all mandatory elements under Indian law
• Final Review: Check all terms align with your business goals before signing

• Party Details: Full legal names, addresses, and GST registration numbers of consignor and consignee
• Product Description: Detailed inventory list with pricing, quality standards, and handling specifications
• Commission Structure: Clear terms for payment calculations, timing, and distribution methods
• Risk and Liability: Insurance requirements, damage policies, and responsibility allocation
• Duration and Termination: Contract period, renewal options, and exit conditions
• Dispute Resolution: Jurisdiction, arbitration procedures under Indian law, and governing regulations
• Confidentiality: Protection of business information and trade secrets
• Signature Block: Space for authorized representatives to execute the agreement

A Consignment Agreement differs significantly from an Agency Agreement, though both involve one party acting on behalf of another. Here's how they differ in the Indian legal context:

• Ownership Structure: In consignment, the consignor retains full ownership until items are sold, while agency agreements don't typically involve physical goods ownership
• Risk Allocation: Consignment deals specifically with inventory risk and sales proceeds, whereas agency agreements cover broader business representation rights
• Payment Model: Consignment focuses on sales commission for specific items sold, while agency agreements often involve fixed fees or varied compensation structures
• Scope of Authority: Agency agreements grant broader powers to represent and bind the principal, while consignment strictly limits authority to selling specific goods
• Legal Framework: Under Indian law, consignment falls under Sale of Goods Act provisions, while agency relationships are governed by the Indian Contract Act's agency sections