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Consignment Agreement
I need a consignment agreement for an art gallery that will display and sell artworks on behalf of local artists, with a 60/40 revenue split in favor of the artist, a 3-month consignment period, and provisions for insurance coverage during the exhibition.
What is a Consignment Agreement?
A Consignment Agreement lets a business owner (the consignor) place their goods with another party (the consignee) to sell them without transferring ownership. Under Belgian commercial law, the consignee acts as an agent, displaying and selling the items while the consignor maintains legal title until the final sale.
These agreements are common in Belgian retail, especially for luxury goods, art, and fashion. The consignee typically earns a percentage of each sale, while avoiding inventory costs. The contract must specify payment terms, handling of unsold items, and insurance requirements - all governed by Belgium's Civil Code provisions on agency relationships and commercial contracts.
When should you use a Consignment Agreement?
Consider using a Consignment Agreement when you want to sell products through another business without giving up ownership. This arrangement works especially well for Belgian retailers testing new markets or artists placing works in galleries. It lets you maintain control while accessing established sales channels and customer bases.
The agreement becomes essential when dealing with high-value items like jewelry, designer clothing, or artwork in Belgium. It protects both parties by clearly defining commission rates, handling procedures, and liability terms. Many Belgian entrepreneurs use these agreements to expand their market reach without the overhead costs of opening new locations.
What are the different types of Consignment Agreement?
- Basic Consignment Agreement: Standard template covering essential terms for general retail and wholesale arrangements
- Clothing Consignment Contract: Specialized for fashion retail with specific provisions for seasonal inventory and condition standards
- Consignment Stock Agreement: Focused on inventory management and warehouse operations with detailed storage terms
- Consignment Manufacturing Agreement: Tailored for production scenarios where materials are provided to manufacturers
- Consignment Contract For Artists: Designed for galleries and exhibitions with specific artwork protection clauses
Who should typically use a Consignment Agreement?
- Business Owners (Consignors): Manufacturers, artists, designers, and retailers who want to sell products through third parties while maintaining ownership
- Retail Stores (Consignees): Shops, galleries, and boutiques that display and sell consigned items for a commission without purchasing inventory
- Legal Advisors: Belgian lawyers who draft and review agreements to ensure compliance with local commercial laws
- Commercial Agents: Professional intermediaries who facilitate consignment arrangements and manage relationships
- Insurance Providers: Companies offering coverage for consigned goods during storage and display
How do you write a Consignment Agreement?
- Party Details: Gather complete business information for both consignor and consignee, including VAT numbers and legal addresses
- Product Information: List all items with detailed descriptions, conditions, and agreed values
- Commission Structure: Define exact percentages, payment terms, and timing of settlements
- Duration Terms: Specify agreement length, renewal options, and notice periods for termination
- Risk Management: Document insurance requirements, liability terms, and procedures for damaged goods
- Quality Control: Outline storage conditions, display requirements, and handling procedures
- Document Generation: Use our platform to create a legally-compliant agreement that includes all these elements automatically
What should be included in a Consignment Agreement?
- Party Identification: Full legal names, addresses, and registration numbers of consignor and consignee
- Product Description: Detailed inventory list with values and conditions under Belgian commercial code
- Commission Terms: Clear percentage rates, payment schedules, and VAT handling procedures
- Risk Allocation: Insurance requirements and liability distribution per Belgian civil law
- Duration Clauses: Agreement period, renewal terms, and termination conditions
- Dispute Resolution: Choice of Belgian court jurisdiction and applicable law provisions
- Performance Standards: Storage conditions, display requirements, and reporting obligations
- Signature Block: Dated signatures with proper representative authority declarations
What's the difference between a Consignment Agreement and an Agency Agreement?
A Consignment Agreement differs significantly from an Agency Agreement in several key aspects, though both involve third-party sales relationships. While consignment deals specifically with physical goods and retained ownership, agency agreements cover a broader range of services and representation rights under Belgian commercial law.
- Ownership Structure: In consignment, the consignor maintains ownership until final sale; in agency, no product ownership transfers occur as the agent simply facilitates deals
- Risk Distribution: Consignment agreements place inventory risk primarily on the consignor, while agency agreements focus on service performance risks
- Commission Basis: Consignment fees typically relate to specific item sales, whereas agency commissions can cover various activities and ongoing relationships
- Legal Framework: Consignment falls under Belgian sales and property law, while agency relationships are governed by specific agency regulations and commercial representation laws
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