Consignment Agreement Template and How to Draft One (2026)

What is a consignment agreement? A consignment agreement lets one party (the consignor) place goods with another party (the consignee) to sell on the consignor's behalf, while the consignor keeps ownership until the goods are sold to an end customer. The consignee holds and sells the stock, takes a commission or margin, and returns or pays for what sells. Unsold goods stay the consignor's property and can be returned. The defining feature is ownership: in consignment, title does not pass to the consignee. The consignee is more like an agent holding stock than a buyer. That is what separates consignment from an outright sale, where ownership and risk pass to the buyer at once, and from a dealership, where the dealer buys and resells on its own account. This is general information, not legal advice. For high-value or long-running consignment, have the final document reviewed by a lawyer. ### Ownership, risk and GST in India Two points cause most consignment problems: - Ownership and risk: state clearly that the consignor owns the goods until sold, and decide who bears the risk of loss or damage while the consignee holds them. Often the consignee holds the goods as a bailee under the Indian Contract Act, 1872 and must take reasonable care, with insurance addressed expressly.

• GST and e-way bill: moving goods to a consignee is a key area to get right. Sending stock on consignment is generally treated as a supply only when the consignee sells, but the physical movement of goods still needs the correct documentation, including an e-way bill and a delivery challan where applicable. Where the consignee is in another state or is a separate GST registration, the treatment can differ. Confirm the current GST position and documentation with your accountant, because the rules are detailed and change. Rules differ by jurisdiction, so for the UK, Ireland, Singapore, Australia or the US, check local sale-of-goods and tax rules. ## Consignment agreement template ``` CONSIGNMENT AGREEMENT This Agreement is made on [DATE] Between [CONSIGNOR NAME], [address] ("the Consignor") and [CONSIGNEE NAME], [address] ("the Consignee"). 1. CONSIGNMENT OF GOODS The Consignor delivers to the Consignee the goods listed in Schedule A ("the Goods") for sale on the Consignor's behalf. Title to the Goods stays with the Consignor until sold to an end customer. 2. TERM This Agreement runs from [date] for [period], renewable by written agreement, and may be ended under Clause 10. 3. THE CONSIGNEE'S ROLE The Consignee holds, displays and sells the Goods on the Consignor's behalf. The Consignee does not own the Goods and shall not pledge or encumber them. 4. PRICING The Consignee sells at the price list in Schedule B. The Consignor may change prices on [n] days' notice. [Any sale below list needs the Consignor's consent.] 5. COMMISSION / MARGIN The Consignee keeps [rate]% of the sale value as commission, OR remits the list price less a margin of [rate]%, on each sale. 6. REMITTANCE AND REPORTING The Consignee reports sales and stock [weekly/monthly] and remits the Consignor's share within [n] days of the end of each period, with a statement of units sold, held and returned. 7. TITLE, RISK AND INSURANCE Title stays with the Consignor until sale. Risk of loss or damage while the Goods are with the Consignee rests with [the Consignee as bailee / the Consignor], and [that party] insures the Goods for their full value. 8. CARE AND STORAGE The Consignee stores the Goods safely and separately from its own stock, keeps them identifiable as the Consignor's property, and allows the Consignor to inspect and take stock on notice. 9. UNSOLD GOODS AND RETURNS The Consignor may recall unsold Goods on [n] days' notice. On termination the Consignee returns all unsold Goods in good condition at [whose] cost within [n] days. 10. TERMINATION Either party may end this Agreement on [n] days' notice, or immediately for material breach or insolvency. On termination the parties reconcile sold, unsold and remitted amounts. 11. TAXES AND DOCUMENTATION The parties handle GST, e-way bills and delivery challans for the movement and sale of the Goods as the law requires. 12. GOVERNING LAW AND DISPUTES Governed by the laws of India. Disputes go to the courts at [city] or to arbitration seated at [city] under the Arbitration and Conciliation Act, 1996. SCHEDULE A - Goods (description, quantity, value) SCHEDULE B - Price list Signed for the Consignor: ____________ Witness: ____________ Signed for the Consignee: ____________ Witness: ____________

- **Clause 3 (role):** the bar on pledging or encumbering the goods matters, because the consignee does not own them and cannot give good title as security.
- **Clause 5 (commission or margin):** choose one model and state the base clearly, so remittance is simple to calculate and check.
- **Clause 6 (remittance and reporting):** regular statements of units sold, held and returned are what keep a consignment honest. Set a short remittance period.
- **Clause 7 (title, risk and insurance):** decide who carries the risk while the goods sit with the consignee and match insurance to it. A gap here is the most expensive mistake after a fire or theft.
- **Clause 8 (care and storage):** requiring the goods to be stored separately and kept identifiable protects the consignor if the consignee has creditors.
- **Clause 9 (unsold goods):** make the recall and return terms clear, including who pays return freight. ## Consignment, sale or dealership? Keep the three apart. In a sale, ownership and risk pass to the buyer at once. In a dealership, the dealer buys and resells on its own account. In consignment, the consignor keeps ownership until the goods sell, the consignee takes commission, and unsold stock comes back. The GST and accounting treatment follows the substance, so draft it to match what really happens. ## Where a contract workspace helps A consignment agreement has to track stock that moves without changing hands: units sold, held and returned reconciled across consignees, remittance chased on time, stock kept identifiable and insured, and GST and e-way bill paperwork following every movement. Drafting, reviewing, tracking and governing a consignment agreement can live in one AI workspace tuned to how your company consigns stock, with an unclear risk-of-loss or remittance term flagged, a version history across consignees kept, and remittance, recall and termination dates in view. [Adira](https://adiralaw.com) is one tool built around that single-workspace idea for inventory contracts like a consignment agreement. This template alone is enough to document one consignment well.