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Typical Consignment Agreement Template for United States

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Key Requirements PROMPT example:

Typical Consignment Agreement

"I need a Typical Consignment Agreement for my art gallery in California to display and sell paintings from multiple artists, with a 40% commission structure and quarterly settlement periods starting from March 2025."

Document background
A Typical Consignment Agreement is essential when business owners want to sell their products through third parties without transferring ownership. This document, governed by U.S. law, establishes the legal framework for consignment relationships, detailing commission structures, payment terms, and risk allocation. It's particularly important for protecting both parties' interests, ensuring clear title to goods, and complying with UCC requirements. The agreement typically includes inventory management procedures, sales reporting requirements, and specific terms for handling unsold merchandise.
Suggested Sections

1. Parties: Identification of consignor and consignee with full legal details

2. Background: Context of the agreement and business relationship

3. Definitions: Key terms used throughout the agreement

4. Consignment Terms: Core terms including pricing, commission, and duration

5. Title and Risk: Ownership rights and risk allocation

6. Payment Terms: Commission structure and payment procedures

7. Termination: Conditions and procedures for ending the agreement

Optional Sections

1. Insurance: Insurance requirements and coverage details for valuable goods or state law compliance

2. Marketing Rights: Terms for advertising and promoting consigned goods when consignee will market the goods

3. International Provisions: Terms for cross-border consignment when parties are in different countries

Suggested Schedules

1. Schedule A - Inventory List: Detailed list of consigned goods with descriptions and values

2. Schedule B - Commission Structure: Detailed breakdown of commission rates and calculations

3. Schedule C - Operating Procedures: Specific procedures for handling, storing, and selling goods

4. Appendix 1 - Insurance Certificates: Copies of required insurance documentation

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

Clauses






























Industries

Uniform Commercial Code (UCC): Primary commercial law framework including Article 2 (Sales) and Article 9 (Secured Transactions), particularly sections covering consignment arrangements and security interests perfection

State-Specific Commercial Laws: Variations of UCC adoption by different states, including state-specific consignment regulations and local business/contract laws

Federal Trade Commission (FTC) Regulations: Federal regulations covering consumer protection rules, fair business practices, and disclosure obligations for consignment arrangements

Tax Laws: Internal Revenue Code provisions for consignment sales, state/local tax obligations, and sales tax considerations

Consumer Protection Laws: Federal and state-specific consumer protection statutes, particularly relevant if consignment involves retail sales to consumers

Bankruptcy Code: Federal bankruptcy provisions affecting consignor's rights and protection of consignor's interest in bankruptcy scenarios

Insurance Requirements: State regulations regarding mandatory insurance coverage and risk allocation requirements for consignment arrangements

Property Laws: Rules and regulations regarding title, possession, and state-specific property regulations affecting consignment relationships

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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