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A Consignment Agreement is a contract between parties that allows one party to sell goods or products on behalf of the other but allows the original party to retain ownership of the goods.

Under a Consignment Agreement, a consignor ships or entrusts goods to the consignee for the purpose of selling the goods to the end customer. The consignee does not pay the consignor until the customer purchases the goods.

A Consignment Agreement is different from a Distribution Agreement in that the consignee does not receive ownership of the consignor’s goods but temporarily holds or controls the consignor’s goods to sell to the end customer.

  • Details of the product;
  • Duration of the consigment;
  • Details of the venue where the consigned merchandise will be sold;
  • Commission percentage for sale; and
  • Notice period for termination.

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