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Auto Consignment Agreement

Auto Consignment Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Auto Consignment Agreement

"I need an Auto Consignment Agreement for my luxury car dealership in Dubai, covering multiple high-end vehicles with a minimum commission rate of 5% and exclusive display rights starting January 2025; the agreement should include specific provisions for vehicle maintenance standards and international buyer transactions."

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Document background
The Auto Consignment Agreement is a critical document used in the UAE automotive market when vehicle owners wish to sell their vehicles through professional dealers without transferring ownership until sale. This agreement type is particularly relevant in the UAE's dynamic automotive market, where both new and used vehicles frequently change hands through professional intermediaries. The document establishes the legal framework for the consignment relationship, defining rights, responsibilities, and commercial terms while ensuring compliance with UAE Federal Laws and local emirate regulations. It includes specific provisions for vehicle valuation, display, maintenance, insurance, and sale processes, as well as commission structures and payment terms. The agreement is designed to protect both parties' interests while facilitating efficient vehicle sales in accordance with UAE commercial practices and automotive trading regulations.
Suggested Sections

1. Parties: Identifies and provides full details of the consignor (vehicle owner) and consignee (dealer/seller), including trade licenses and relevant contact information

2. Background: Explains the context of the agreement, including the consignor's ownership of vehicles and consignee's business of selling vehicles

3. Definitions: Defines key terms used throughout the agreement, including 'Consigned Vehicles', 'Consignment Period', 'Sale Price', 'Commission Rate', etc.

4. Appointment and Scope: Establishes the consignment relationship and defines the consignee's authority to sell vehicles

5. Term and Termination: Specifies the duration of the agreement and conditions for termination

6. Consignment Process: Details the procedure for adding vehicles to consignment, including condition assessment and documentation

7. Pricing and Commission: Establishes the method for setting sale prices and calculating the consignee's commission

8. Responsibilities of Consignor: Outlines the vehicle owner's obligations, including providing clear title and maintenance records

9. Responsibilities of Consignee: Details the dealer's obligations regarding vehicle storage, marketing, showing, and selling

10. Insurance and Risk: Addresses insurance requirements and allocation of risk while vehicles are in consignment

11. Payment Terms: Specifies timing and method of payment after vehicle sales

12. Representations and Warranties: Contains standard warranties about vehicle condition, ownership, and authority to sell

13. General Terms: Includes standard legal provisions such as governing law, notices, and amendments

Optional Sections

1. Marketing and Advertising: Detailed provisions about marketing responsibilities and cost allocation, used when specific marketing arrangements are needed

2. Exclusivity: Provisions restricting the consignor from consigning vehicles to other dealers, used in exclusive arrangements

3. International Sales: Additional provisions for cross-border sales, used when international transactions are contemplated

4. Minimum Performance Requirements: Sets sales targets or minimum performance standards, used in larger commercial arrangements

5. After-Sale Services: Provisions regarding warranty and after-sale support, used when dealer provides post-sale services

6. Digital Platforms: Provisions regarding online sales and digital marketing, used when online platforms are part of the sales strategy

Suggested Schedules

1. Schedule 1 - Consigned Vehicles: Detailed list of vehicles under consignment, including specifications, condition reports, and agreed pricing

2. Schedule 2 - Commission Structure: Detailed breakdown of commission rates, including any sliding scales or special arrangements

3. Schedule 3 - Operating Procedures: Detailed procedures for vehicle handling, showroom display, test drives, and sales process

4. Schedule 4 - Required Documentation: List of required documents for vehicle consignment and transfer

5. Appendix A - Condition Report Template: Standard form for recording vehicle condition at consignment

6. Appendix B - Sales Report Template: Standard form for monthly sales reporting

Authors

Alex Denne

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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant Industries

Automotive

Retail

Transportation

Fleet Management

Luxury Goods

Insurance

Financial Services

Logistics

Vehicle Leasing

Relevant Teams

Legal

Sales

Operations

Finance

Compliance

Risk Management

Business Development

Commercial

Vehicle Operations

Contract Administration

Relevant Roles

Automotive Sales Manager

Fleet Manager

Legal Counsel

Commercial Director

Business Development Manager

Compliance Officer

Operations Manager

Sales Director

Contract Administrator

Vehicle Assessment Specialist

Dealership Owner

Risk Manager

Finance Manager

General Manager

Industries
UAE Federal Law No. 5 of 1985 (Civil Code): Governs general contractual principles, obligations, and commercial relationships between parties. Particularly relevant for contract formation, validity, and enforcement provisions.
UAE Federal Law No. 18 of 1993 (Commercial Transactions Law): Regulates commercial transactions and business relationships, including provisions for sales, commercial papers, and business obligations.
UAE Federal Law No. 24 of 2006 (Consumer Protection Law): Protects consumer rights and regulates business practices, particularly relevant for vehicle sales to end consumers.
UAE Federal Law No. 2 of 2015 (Commercial Companies Law): Provides framework for business relationships and company operations, relevant for establishing the consignment relationship.
UAE Federal Law No. 18 of 1981 (Commercial Agency Law): Regulates commercial agency relationships and representation agreements, which may be applicable to consignment arrangements.
UAE Federal Traffic Law: Governs vehicle registration, transfer of ownership, and related documentation requirements for automotive transactions.
Dubai Executive Council Resolution No. 49 of 2014: Specific to Dubai: Regulates the activities of selling and buying used cars, including requirements for car trading establishments.
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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