Consignment Business Agreement Between Two Parties (India)
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.
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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About this template
What is this template?
This document is a commercial contract for consignment sales in India where the supplier remains the owner of the stock. It is not a sale of goods agreement or a franchise agreement because it does not transfer title at the point of delivery. It contains specific provisions for Minimum Sales Price and the physical protection of consigned inventory.
When should you use it?
Use this document when you want to supply goods to a distributor but keep ownership until the end-customer pays. If you are selling the goods outright to a wholesaler, use a Sale of Goods Agreement instead.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 1 | Consignment of Goods | The Consignor delivers goods to the Consignee for sale at a price not less than the Minimum Sales Price. |
| 2 | Ownership of Goods | The Consignor retains full legal title and ownership of all goods until they are sold to a third-party customer. |
| 3 | Consignee's Obligations | The Consignee must store goods in a clean, dry, and secure location and maintain a separate inventory record. |
| 4 | Commission and Payment | The Consignee receives a commission percentage on the total sales price and must remit the balance within a specified number of days. |
| 6 | Term and Termination | Either party may terminate the agreement by providing a written notice period of a specified number of days. |
| 9 | Governing Law and Jurisdiction | The agreement is governed by the laws of India with exclusive jurisdiction granted to the courts of a specified city. |
Who it's for
- an Indian manufacturer providing inventory to a retail outlet without transferring title upfront
- a supplier seeking to test a new market through a local agent in India
- a retail store operator accepting high-value goods for sale on commission basis
How long it runs and how it's signed
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