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Consignment Agreement for Nigeria

Consignment Agreement Template for Nigeria

A Consignment Agreement under Nigerian law is a legal contract where one party (the consignor) entrusts goods to another party (the consignee) for sale, while retaining ownership until the goods are sold. This agreement, governed by Nigerian commercial law including the Sales of Goods Act and Contract Law Act, establishes the terms for product handling, sales, commission structures, reporting requirements, and risk allocation. It details the responsibilities of both parties, payment terms, and operational procedures while ensuring compliance with Nigerian regulatory requirements and business practices.

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What is a Consignment Agreement?

The Consignment Agreement is a crucial document used in Nigerian business operations when a product owner wishes to place goods with a seller or distributor without immediately transferring ownership. This arrangement is particularly common in retail, manufacturing, and distribution sectors where businesses want to expand their market reach while maintaining control over their inventory. The agreement comprehensively covers the consignment relationship, including commission structures, sales terms, inventory management, reporting requirements, and risk allocation. It must comply with Nigerian commercial law, including the Sales of Goods Act and Contract Law Act, while addressing specific local business practices and regulatory requirements. This document is essential for businesses looking to establish clear terms for consignment relationships while protecting their interests under Nigerian jurisdiction.

What sections should be included in a Consignment Agreement?

1. Parties: Identification of the consignor and consignee, including full legal names and addresses

2. Background: Context of the agreement and brief description of the business relationship

3. Definitions: Definitions of key terms used throughout the agreement

4. Appointment and Scope: Terms of the consignee's appointment and scope of authority

5. Consignment of Goods: Description of the consignment process and handling of goods

6. Pricing and Commission: Pricing structure, commission rates, and payment terms

7. Title and Risk: Provisions regarding ownership of goods and risk allocation

8. Obligations of the Consignor: Responsibilities and duties of the consignor

9. Obligations of the Consignee: Responsibilities and duties of the consignee

10. Reporting and Accounting: Requirements for financial reporting and accounting procedures

11. Term and Termination: Duration of agreement and termination provisions

12. Confidentiality: Protection of confidential information

13. Governing Law and Jurisdiction: Specification of Nigerian law as governing law and jurisdiction

14. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

What sections are optional to include in a Consignment Agreement?

1. Insurance: Insurance requirements when specific coverage is needed for high-value goods

2. Intellectual Property: IP protection clauses when branded or proprietary products are involved

3. Marketing and Promotion: Terms for marketing activities when consignee is responsible for promotion

4. Exclusivity: Exclusivity provisions when territory or product exclusivity is granted

5. Storage and Warehousing: Specific storage requirements for goods requiring special handling

6. Return of Goods: Detailed procedures for returning unsold goods when applicable

7. Sub-agents: Provisions regarding appointment of sub-agents if allowed

8. Force Majeure: Force majeure provisions for markets with significant political or economic volatility

What schedules should be included in a Consignment Agreement?

1. Schedule 1 - Products: Detailed list of consigned products with specifications

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

3. Schedule 3 - Territory: Definition of geographical territory for consignment activities

4. Schedule 4 - Reporting Templates: Standard forms for required reports and accounting

5. Schedule 5 - Operating Procedures: Detailed procedures for handling, storing, and selling consigned goods

6. Appendix A - Service Level Agreement: Specific performance metrics and standards

7. Appendix B - Authorization Letter: Standard format for authorization letters to third parties

Authors

Alex Denne

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

Jurisdiction

Nigeria

Publisher

Ƶ

Document Type

Agreement Contract

Cost

Free to use
Relevant legal definitions
































Clauses





























Relevant Industries

Retail

Manufacturing

Distribution and Logistics

Fashion and Apparel

Electronics

Automotive Parts

Agricultural Products

Consumer Goods

Art and Collectibles

Industrial Equipment

Pharmaceuticals

Relevant Teams

Legal

Finance

Operations

Sales

Supply Chain

Procurement

Compliance

Business Development

Distribution

Risk Management

Commercial

Relevant Roles

Commercial Director

Sales Manager

Operations Manager

Supply Chain Manager

Chief Financial Officer

Inventory Manager

Business Development Manager

Legal Counsel

Procurement Manager

Distribution Manager

Retail Operations Manager

Finance Director

Compliance Officer

Contract Administrator

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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