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Consignment Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Consignment Agreement

"I need a Consignment Agreement for my luxury watch business where I'll be providing watches to a high-end retailer in Hong Kong, with a 25% commission rate and minimum performance requirements of HKD 2 million in sales per quarter starting March 2025."

Document background
A Consignment Agreement is essential for businesses operating under a consignment model in Hong Kong, where goods are provided for sale without immediate transfer of ownership. This document is particularly relevant when suppliers wish to expand their distribution without selling directly to retailers, or when retailers want to minimize inventory risk. The agreement, compliant with Hong Kong law, covers critical aspects such as commission rates, payment terms, inventory management, risk allocation, and reporting requirements. It should be used when establishing new consignment relationships or formalizing existing arrangements, ensuring both parties' interests are protected while adhering to Hong Kong's commercial law framework.
Suggested Sections

1. Parties: Identifies and provides full details of the consignor and consignee, including their legal status and registered addresses

2. Background: Sets out the context of the agreement, including the nature of the businesses and their intention to enter into a consignment arrangement

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes rules for interpreting the agreement

4. Appointment and Scope: Establishes the consignment relationship and defines its scope, including territory and exclusivity provisions

5. Delivery and Receipt of Goods: Details the process for delivery, inspection, and acceptance of consigned goods

6. Title and Risk: Clarifies that title remains with the consignor while goods are in possession of consignee, and addresses risk allocation

7. Pricing and Commission: Sets out the pricing structure for consigned goods and the commission rate for the consignee

8. Payment Terms: Specifies payment procedures, timing, and method of payment for sold goods

9. Consignee's Obligations: Details the responsibilities of the consignee including storage, care, and marketing of goods

10. Consignor's Obligations: Outlines the responsibilities of the consignor including product quality and support

11. Reporting and Records: Specifies requirements for inventory management, sales reporting, and record-keeping

12. Term and Termination: States the duration of the agreement and circumstances for termination

13. Return of Goods: Procedures for returning unsold goods to the consignor

14. Confidentiality: Protects confidential information shared between parties

15. General Provisions: Standard clauses including governing law, notices, and entire agreement provisions

Optional Sections

1. Insurance: Required when specific insurance arrangements need to be detailed, particularly for high-value goods

2. Marketing and Promotion: Include when specific marketing obligations or restrictions need to be imposed on the consignee

3. Minimum Performance Requirements: Used when setting specific sales targets or performance metrics

4. Storage Requirements: Important for goods requiring special storage conditions or handling

5. Intellectual Property: Include when branding, trademarks, or other IP rights need protection

6. Non-Competition: Add when restricting consignee from selling competing products

7. Force Majeure: Important for high-value or long-term consignment arrangements

8. Dispute Resolution: Include detailed dispute resolution procedures for high-value contracts or international consignments

Suggested Schedules

1. Schedule 1 - Consigned Goods: Detailed list of products covered by the agreement, including specifications and pricing

2. Schedule 2 - Commission Structure: Detailed breakdown of commission rates, including any volume-based variations

3. Schedule 3 - Territory: Defined geographical areas or locations where consignee is authorized to sell

4. Schedule 4 - Reporting Templates: Standard forms for inventory and sales reporting

5. Schedule 5 - Storage and Handling Requirements: Specific requirements for storage, handling, and display of goods

6. Appendix A - Return Procedures: Detailed procedures for returning unsold or damaged goods

7. Appendix B - Quality Standards: Specific quality standards and inspection criteria for the goods

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions































Clauses

































Relevant Industries

Retail

Wholesale Trade

Luxury Goods

Fashion and Apparel

Art and Antiques

Electronics

Automotive

Furniture and Home Goods

Jewelry

Agriculture and Food

Sporting Goods

Books and Publications

Industrial Equipment

Relevant Teams

Legal

Commercial

Sales

Operations

Finance

Supply Chain

Procurement

Compliance

Business Development

Retail Operations

Warehouse Operations

Contract Administration

Relevant Roles

Commercial Director

Sales Manager

Retail Operations Manager

Supply Chain Manager

Legal Counsel

Business Development Manager

Finance Manager

Inventory Manager

Procurement Manager

Compliance Officer

Contract Administrator

Store Manager

Warehouse Manager

Chief Commercial Officer

Regional Sales Director

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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