Consignment Contract Template for India

A Consignment Contract is essential for businesses looking to expand their distribution network without establishing direct retail operations or transferring ownership of goods. This document, governed by Indian law, is particularly useful in scenarios where manufacturers, wholesalers, or owners want to place their products with retailers or agents while maintaining ownership until final sale. The contract addresses critical aspects such as commission structures, inventory management, reporting requirements, and risk allocation, ensuring compliance with the Indian Contract Act, Sale of Goods Act, and GST regulations. It's commonly used in retail, luxury goods, art, and various other sectors where sellers want to maintain control over their products while leveraging third-party sales channels. The agreement provides protection for both parties by clearly defining responsibilities, payment terms, and procedures for handling unsold inventory.

1. Parties: Identifies the consignor (owner of goods) and consignee (agent/dealer) with complete legal names, addresses, and registration details

2. Background: Explains the context of the arrangement, including the consignor's business, need for consignment, and consignee's qualifications

3. Definitions: Defines key terms used throughout the agreement including 'Consigned Goods', 'Territory', 'Consignment Period', etc.

4. Appointment and Scope: Details the appointment of consignee, territory coverage, and exclusivity terms if any

5. Consignment Terms: Core terms including delivery, storage, handling of goods, and consignment period

6. Pricing and Commission: Establishes selling price guidelines, commission structure, and payment terms

7. Title and Risk: Clearly states that title remains with consignor until sale, and addresses risk allocation

8. Obligations of Consignor: Lists consignor's responsibilities including product supply, support, and information provision

9. Obligations of Consignee: Details consignee's duties including storage, sales efforts, reporting, and customer service

10. Records and Reporting: Specifies inventory management, sales reporting, and accounting requirements

11. Term and Termination: Duration of agreement, renewal terms, and termination conditions

12. Post-Termination: Procedures for handling unsold inventory, final accounts, and transition

13. General Provisions: Standard clauses including notices, governing law, dispute resolution, etc.