What is a consignment contract? A supply contract is a type of contract between two parties, the sender and the recipient, that defines the details of the contract, such as the sale, resale, transportation, storage or use of certain goods. At the beginning, the contract must be concluded by both parties. A well-developed agreement will prevent/minimize confusion, misunderstandings and errors and clearly express the expectations and responsibilities of each party. Once the contract is signed, each party can focus on its own specialty: the distributor sells and the manufacturer creates. This promotes the success of the division of labour without interference from both parties or, in the long run, a profitable agreement. Here are some tips for entering into a good simple consignment contract: delivery contracts are legal contracts in which one party, called a shipper, grants legal rights to another party, designated as the recipient, for the sale, resale, storage or transfer of goods on behalf of the shipper. The recipient is entitled to a royalty from the recipient representing a percentage of the sale price. That`s his mission. The percentage is agreed between the two parties. Rules on the terms of payment for products sold (minus the recipient`s fee) are also included in the agreement. Revenues can be paid in an agreed number of days: either weekly, monthly or by other agreement. During shipping, the sender can ask the recipient to return their products by communing a notification to the recipient. This section describes how the sender should notify the recipient and how long the notice period is.

In addition, at the end of the delivery period, the recipient may require the sender to recover its products, which must be determined, as well as the length of its delay. Consider the tips for creating a good template for consignment agreements. A well-developed agreement will avoid problems that may arise in the future as part of the partnership and redefine the responsibilities of the sender and recipient. As a general rule, the recipient bears the shipping costs of the products shipped. However, it may be agreed that the sender would do so. All that needs to be done in the agreement is to change the word “recipient” to “recipient.” For both the sender and the recipient, the document they sign is “agreement” on issues related to their draft consignment. If previous agreements were to be concluded, priority would be given to the signed agreement. Since the shipping agreement relates to the sale of good sales by the recipient as a third party, the agreement should contain one or more clauses indicating the percentage of sales retained by the recipient as a “fee” for its services. Sending is a trade agreement or method by which the recipient agrees to store, sell, resell or transfer goods held by the sender, in exchange for a percentage of the turnover called commission. In this case, the shipper holds the legal ownership of the goods and the recipient acts only within the authorized acts specified in the delivery contract. The conclusion of a supply contract is a good measure for the supplier.

Think about the benefits and/or incentives for both parties. But also be aware of the potential problems that arise.