Consignment Business Agreement Between Two Parties (India) by OLL
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Business Agreement format between two parties – India
This agreement is executed at ——————————— on ———————————. by and between:
M/S———————————————————————————————,
(hereinafter Called Party of FIRST PARTY, Which Expression shall unless repugnant to the context or meaning, therefore, be deemed to include its successors in-business, executors, administrators, and lawful assigns).
AND
M/S —————————————————————————————-
(Hereinafter Called SECOND PARTY, Which Expression shall unless repugnant to the context or meaning, therefore, be deemed to include its successors-in business, executors, administrators, and lawful assigns)
WHEREAS the FIRST PARTY wants to carry out the business of retailing, storing such products on the below-mentioned property belonging to/leased by the
SECOND PARTY.
WHEREAS after mutual discussion party of FIRST PARTY selected air conditioned show room of SECOND PARTY measuring about ———— Sq. ft. located at ———————————————————————————————————-as Outlet for sale on retail of said products—————————————————————- and therefore the parties have entered into this agreement on following terms and conditions;
1. That both the parties agree that the proposed retail showroom is to be exclusively used as retail out let for the products supplied by the party of FIRST PARTY. Any additional premises if offered by the SECOND PARTY shall be added with the mutual approval by both the parties.
2. All the renovation charges like air conditioning, flooring, ceiling, lighting and all glasswork, electric fitting, generator/inverter sets, etc. will be provided by the SECOND PARTY as per specification/instructions/drawings and requirements of the party of first part .Architect will be provided/fixed by the party of first part.
3. However, all interior decoration work including the wood work, wall modules, floor modules, cash counters, shall be supplied and installed at the cost of FIRST PARTY which will be subsequently adjusted between the parties as expenses.
4. The SECOND PARTY shall arrange for sufficient electrical load and all other infrastructural facilities and utilities including the common services for properly operating and running the showroom as per the requirement of FIRST PARTY, the cost of the same shall be borne by the SECOND PARTY exclusively. The SECOND PARTY shall also pay house tax or any other property tax imposed by the local municipal authorities, Ground rent etc or by any Govt. Agency or local bodies from time to time. All the dues of any type raised after wards, before the date of execution of this deed shall be cleared by the SECOND PARTY. The SECOND PARTY shall not subject the FIRST PARTY in any dispute what so ever be, before any authority or court or Tribunal etc.
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This template establishes a business relationship where one party provides retail goods on a consignment basis to be sold at a showroom managed by the second party. It outlines terms for stock ownership, commission margins, operational expenses, and the use of the supplier's trademark.
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About this template
What is this template?
This document is a consignment-based retail partnership agreement between a product supplier and a showroom provider. It is not a standard lease or a simple sale of goods contract because the supplier retains ownership of all stock until the point of retail sale. It uniquely requires the supplier to pay the wages of the agent's staff and specific utility bills.
When should you use it?
Use this when you want to place products in a physical store without selling them to the shopkeeper first, and when you intend to control the pricing and marketing directly. If you are simply renting space for a fixed fee without sharing sales margins, use a Commercial Lease Agreement instead.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1 | Exclusivity and Use | Restricts the Second Party from using the showroom for any purpose other than retailing products supplied by the First Party. |
| 3-4 | Interior Decoration and Infrastructure | Allocates interior woodwork costs to the First Party while the Second Party bears electricity, house tax, and municipal property tax expenses. |
| 5-6 | Consignment Terms and Pricing | Establishes that all stock remains First Party property and allows the First Party to fix all retail rates and discount periods. |
| 7 | Commission and Reconciliation | Entitles the Second Party to a margin or commission that requires monthly reconciliation and deduction of applicable Income Tax. |
| 9 | Running Expenses | Obliges the First Party to pay for showroom electricity, telephone, water, and sales employee wages despite the staff being employed by the Second Party. |
| 15 | Minimum Stock Value | Requires the First Party to maintain a minimum inventory value at the showroom as specified in the agreement blanks. |
| 18 | Refundable Security | Directs the Second Party to provide a security deposit that is returned only after contract expiry and stock lifting. |
| 22 | Ownership of Custody and Goods | Prohibits the Second Party from pledging, gifting, or creating any lien over the products entrusted to their judicial custody. |
Who it's for
- a supplier seeking to sell goods through an air-conditioned showroom owned or leased by another party
- a retail outlet owner in India acting as a consignment agent for branded products
- a business relationship where the supplier bears operational expenses like electricity and wages but the agent manages the premises
How long it runs and how it's signed
Law it's drafted under
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