Key Takeaways
- •List each item, condition, value, price and minimum net.
- •Define the commission base, extra charges and actual payment deadline.
- •Retaining ownership alone does not establish creditor priority.
- •Art and vehicle consignments can require specific protections and forms.
- •An unsigned sample does not prove delivery, insurance or legal compliance.
Reviewed for accuracy by the document.com legal team. Educational information, not legal advice.
What Is Consignment Agreement?
A consignment agreement lets a seller offer identified goods on the owner’s behalf under agreed authority. It should define each item, prices, fees, proceeds, custody, records and return terms. It is different from an outright purchase by the seller.
The builder supports merchandise, art, apparel, vehicle and online contexts. Complete actual terms and required review before presenting signature fields. The general draft does not replace official vehicle documents or certify statutory trust or priority protection.
Resolve the goods and money before delivery
An aggregate description is not enough when items have different values, commissions or minimum prices. Write the relevant details into the itemized inventory.
A percentage without a defined base can produce a payment dispute. Distinguish sale price, tax, shipping, fees, refunds and the owner’s minimum net.
Decide who may handle, move, repair or insure the goods, and how unsold items are returned. A collection deadline should not silently authorize disposal.
Creditor, art and vehicle requirements
Title retention is not automatic creditor protection
Ownership between consignor and consignee is only part of the analysis. Article 9 has a defined consignment category, including merchant, value and prior-use conditions. Its consumer-goods exclusion does not eliminate every other risk or rule. The cited New York enactment illustrates the provisions; check the governing state’s text.
Review priority before delivering inventory
Where Article 9 applies, a consignor’s interest is treated as inventory purchase-money security. The consignee can be deemed to have rights for creditor and purchaser purposes. Inventory priority generally requires perfection when possession begins and required notice to conflicting secured creditors beforehand. A signed agreement does not complete a filing or notice.
Buyer and bankruptcy rights also matter
Entrusting goods to a merchant can affect an ordinary-course buyer’s rights despite private instructions. Bankruptcy stays and restrictions on insolvency-triggered termination can limit recovery. Do not assume that a private title clause permits immediate self-help repossession.
Art protections depend on the actual consignor and transaction
An artist consigning their own work is different from a collector reselling another person’s work. New York’s law addresses qualifying artists, craftspeople and specified successors, works and proceeds. The builder supplies no trust waiver. Other states’ coverage, loss responsibility and payment requirements need their own review.
Illinois requires actual written art terms
For covered artist/dealer consignments, Section 5 requires a written agreement before or within seven days after acceptance, identifying work value, payment timing, commission and minimum price/discount terms. Required artist credit matters too. Complete the facts; a generated agreement does not prove delivery or timeliness.
Physical artwork and copyright are separate
Selling or consigning the physical work does not itself transfer copyright. Record any limited permission for images and exhibition, with proper authority and credit. The agreement does not insert a copyright transfer or moral-rights waiver.
Vehicle consignments require state documents
California DMV guidance requires the terms and disclosures in Vehicle Code 11730 and identifies a twenty-day after-sale payment requirement under 11705(a)(10). Utah requires an attached completed TC-120, a written agreement before driving and specified use/damage terms. Utah’s payment guidance uses twenty-one days after sale or fifteen after payment, whichever is earlier, unless rescinded. The general draft is not a substitute for required forms.
Platform tax duties are transaction-specific
A marketplace name does not establish tax treatment. California’s guidance, for example, distinguishes qualifying facilitated sales, direct sales, registration and documentation. Record the actual jurisdictions, channel and platform responsibilities; do not assume a platform handles every tax or that a reserve removes statutory payment duties.
Terms to complete
Actual owner, seller, authority, locations, liens and restrictions.
Itemized identity, quantity, condition, value, prices and minimum net.
Permitted sales channels, discounts, markdowns and credit sales.
Fee base, amounts, charges, payment dates and itemized reporting.
Care, lawful risk allocation, insurance evidence and creditor review.
Customer returns, unsold goods, termination and actual delivery records.
Five consignment contexts
General Merchandise Consignment Agreement
Art Consignment Agreement
Apparel Consignment Agreement
Vehicle Consignment Agreement
Online Consignment Agreement
How to Fill Out Consignment Agreement
1. Identify the goods and authority
List the actual items and conditions, owner, seller, locations, liens and permitted sales.
2. Agree prices and payment
Define per-item prices, discounts, fee base, other charges and actual payment dates.
3. Resolve custody and mandatory duties
Check care, insurance, creditor priority and any art, vehicle, consumer or tax requirements before delivery.
4. Complete, sign and record delivery
Resolve outstanding terms, use required official forms and sign only after review. Complete the itemized receipt after actual delivery.
Key Terms Defined
- Consignor
- The person placing identified goods with another for sale under agreed authority.
- Consignee
- The seller receiving goods for the agreed consignment purpose.
- Minimum net
- The amount the owner must receive after the expressly authorized deductions; it differs from minimum sale price.
- Perfection and priority
- Legal steps and rules affecting an interest’s effectiveness against third parties; private title retention alone does not establish them.
Related Documents
General merchandise
Focus on identifiable goods, actual authority, prices and creditor review.
Art
Check artist/dealer coverage, trust and care duties, credit and limited image permissions.
Apparel
Record item condition, safety, authorized markdowns and return arrangements.
Vehicle
Check dealer licensing, title and odometer documents, charges and mandatory state forms.
Online
Identify actual accounts, platform terms, fulfillment, returns and tax documentation.
Legal Authorities & Sources
This page is grounded in primary law. The statutes and official resources below are the authorities behind the guidance above. Verify the current text of any statute before relying on it.
- Article 9 consignment coverage — New York enactment
- Consignor inventory purchase-money interest — New York enactment
- Rights of consignee against creditors — New York enactment
- Inventory priority and advance notice — New York enactment
- Entrustment and buyer rights — New York enactment
- New York artist and craftsperson consignments
- Illinois written art contract and attribution
- California DMV dealer consignments
- Utah DMV consignments and TC-120
- Bankruptcy automatic stay — 11 USC 362
- Bankruptcy executory contracts — 11 USC 365
- Physical ownership and copyright — 17 USC 202
- Artist attribution and integrity — 17 USC 106A
- California marketplace facilitator and seller duties
Frequently Asked Questions
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