Consignment Agreement (UK)
This Consignment Agreement (the “Agreement”) is entered into on [Effective Date] (the “Effective Date”) by and between:
[Consignor Name], [Consignor Type], with its registered or principal address at [Consignor Address], [Consignor City], [Consignor County], [Consignor Postcode] (hereinafter referred to as the “Consignor”); and
[Consignee Name], [Consignee Type], with its registered or principal address at [Consignee Address], [Consignee City], [Consignee County], [Consignee Postcode] (hereinafter referred to as the “Consignee”).
The Consignor and the Consignee are referred to collectively as the “Parties” and individually as a “Party”.
BACKGROUND
The Consignor wishes to place certain goods on consignment with the Consignee for the purpose of sale, and the Consignee wishes to accept such goods and attempt to sell them on the Consignor’s behalf, on the terms and conditions set out in this Agreement.
NOW, THEREFORE, in consideration of the mutual obligations herein, the Parties agree as follows:
1. CONSIGNED GOODS
1.1 The Consignor shall deliver to the Consignee the following goods on consignment (the “Goods”): [Goods Description].
1.2 Title to the Goods shall remain with the Consignor at all times until the Goods are sold to a third-party purchaser. The Consignee holds the Goods as bailee for the Consignor and shall not encumber, pledge, or dispose of the Goods except by sale in the ordinary course of business in accordance with this Agreement.
1.3 On delivery of the Goods, the Parties shall prepare and sign a consignment inventory schedule recording the description, quantity, and agreed value of each item. The inventory schedule shall form part of this Agreement.
2. SALE OF GOODS
2.1 The Consignee is authorised to offer the Goods for sale to third-party customers at the following price or pricing basis: [Sale Price].
2.2 The Consignee shall not sell any of the Goods below the minimum authorised price without the prior written consent of the Consignor.
2.3 The Consignee shall sell the Goods as agent of the Consignor. Sales contracts with customers shall be entered into by the Consignee in its own name, but the beneficial interest in the proceeds of sale shall vest immediately in the Consignor, subject to deduction of the Consignee’s commission.
2.4 The Consignee shall comply with all applicable consumer protection laws, including the Consumer Rights Act 2015, when selling the Goods to consumers.
3. COMMISSION
3.1 In consideration for selling the Goods, the Consignee shall be entitled to a commission of: [Commission Rate] on each sale of Goods.
3.2 The commission shall be deducted from the proceeds of each sale before remittance to the Consignor.
3.3 All amounts stated are exclusive of VAT, which shall be charged at the applicable rate where required.
4. PAYMENT TO CONSIGNOR
4.1 The Consignee shall remit the net sale proceeds (i.e. the sale price less the agreed commission) to the Consignor as follows: [Payment Terms].
4.2 The Consignee shall maintain a separate account of all sales of Goods and shall provide the Consignor with a written sales statement at each payment date, showing items sold, amounts received, commission deducted, and net proceeds remitted.
4.3 If the Consignee fails to remit any amount due, interest shall accrue on the overdue amount at the rate of 8% per annum above the Bank of England base rate pursuant to the Late Payment of Commercial Debts (Interest) Act 1998.
5. TERM AND RETURN OF UNSOLD GOODS
5.1 This Agreement shall commence on the Effective Date and continue for [Agreement Term] (the “Consignment Period”), unless terminated earlier in accordance with this Agreement.
5.2 At the end of the Consignment Period (or upon earlier termination), all unsold Goods shall be dealt with as follows: [Unsold Goods Return].
5.3 Either Party may terminate this Agreement on 14 days’ written notice. On termination, the Consignee shall immediately cease selling the Goods and shall arrange for the return or disposal of unsold Goods in accordance with the Consignor’s instructions.
5.4 Either Party may terminate this Agreement immediately if the other Party becomes insolvent, enters administration, has a receiver appointed, or passes a resolution for winding up.
6. CARE AND CUSTODY OF GOODS
6.1 The Consignee shall take reasonable care of the Goods while they are in its possession and shall store them in a secure, dry, and appropriate environment.
6.2 The Consignee shall not damage, alter, repair, or modify the Goods without the prior written consent of the Consignor.
6.3 The Consignee shall bear the risk of loss or damage to the Goods while they are in its possession. If any Goods are lost, stolen, or damaged, the Consignee shall compensate the Consignor at the agreed consignment value of the affected items.
7. CONSIGNOR WARRANTIES
7.1 The Consignor warrants that: (a) it has full legal title to the Goods and the right to place them on consignment; (b) the Goods are free from any lien, charge, or encumbrance; (c) the Goods comply with all applicable product safety regulations; and (d) the sale of the Goods will not infringe any third-party intellectual property rights.
8. GENERAL PROVISIONS
8.1 Entire Agreement. This Agreement constitutes the entire agreement between the Parties relating to the consignment and supersedes all prior agreements and understandings.
8.2 Amendment. No amendment shall be valid unless made in writing and signed by both Parties.
8.3 Severability. If any provision is invalid or unenforceable, the remaining provisions shall continue in full force.
8.4 Third Party Rights. A person not party to this Agreement has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.
8.5 Governing Law. This Agreement is governed by and construed in accordance with the laws of [Jurisdiction]. Each Party submits to the exclusive jurisdiction of the courts of [Jurisdiction].
IN WITNESS WHEREOF, the Parties have executed this Consignment Agreement as of the Effective Date first written above.
THE CONSIGNOR
Full name: [Consignor Name]
Address: [Consignor Address], [Consignor City], [Consignor County], [Consignor Postcode]
THE CONSIGNEE
Full name: [Consignee Name]
Address: [Consignee Address], [Consignee City], [Consignee County], [Consignee Postcode]
Consignor
________________
Signature
Date: ________________
Consignee
________________
Signature
Date: ________________
What Is a Consignment Agreement (UK)?
A Consignment Agreement in the United Kingdom sets the services to be provided, the fees, the timetable, and each side's responsibilities for the engagement, and takes its legal force from the Sale of Goods Act 1979.
Consignment arrangements are used across a wide range of commercial sectors in the United Kingdom. Typical examples include art galleries receiving original paintings or sculptures from artists and selling them to collectors; antique dealers accepting consignment stock from private owners or estates; fashion boutiques stocking items from designers on a sale-or-return basis; specialty food, drink, and craft producers placing products with retailers, delis, or farm shops on consignment; and online platforms facilitating the consignment sale of second-hand or pre-owned goods.
The legal framework governing consignment arrangements in England and Wales includes the Sale of Goods Act 1979 (which governs the transfer of property and risk in goods), general agency law principles (since the Consignee may act as the Consignor's agent in concluding sales), the Commercial Agents (Council Directive) Regulations 1993 (which may apply if the Consignee concludes contracts in the Consignor's name), and the Consumer Rights Act 2015 (relevant where the Consignee sells to consumers). VAT treatment is governed by the Value Added Tax Act 1994 and HMRC guidance.
The United Kingdom Consignment Agreement (UK) Consignment Agreement template is designed for use between a UK Consignor and a UK Consignee operating in England and Wales. It covers the consigned goods, title retention, authorised sale price, commission, payment of proceeds, care and custody, insurance obligations, the consignment period, and the return of unsold goods.
The legal framework governing the Consignment Agreement (UK) in United Kingdom draws on several key statutes and regulatory bodies. Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Parties executing a Consignment Agreement (UK) in United Kingdom should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies Act 2006 sets the foundational requirements.
When Do You Need a Consignment Agreement (UK)?
A Consignment Agreement is required whenever a business or individual (the Consignor) wishes to place goods with a third-party reseller (the Consignee) for sale on a commission basis, without transferring ownership of the goods to the Consignee upfront. The agreement formalises the commercial relationship, protects the Consignor's title to the goods, and provides clarity on the commission, payment, and return arrangements.
A Consignment Agreement is particularly important in the following situations. First, where the Consignor is placing high-value goods with the Consignee, such as original artworks, jewellery, antiques, or rare collectibles. In these cases, it is essential to have clear written documentation of the goods placed on consignment, their agreed value, and the Consignee's obligations to insure and care for them.
Second, where the Consignor is a producer or manufacturer testing a new product or market by placing goods with multiple retailers on a consignment basis before committing to supplying them on a buy-and-hold basis. This reduces the Consignor's exposure if the product does not sell.
Third, where the Consignee is a specialist retailer, gallery, or market stall that operates primarily on a consignment model, accepting stock from multiple Consignors and earning commission on sales rather than buying stock outright.
Fourth, where the Consignor is concerned about the Consignee's financial stability and wishes to retain title to the goods in the event of the Consignee's insolvency, so that the goods do not form part of the Consignee's insolvent estate.
The Consignment Agreement should ideally be signed before the goods are delivered to the Consignee, and a consignment inventory should be prepared at the same time recording the description, quantity, and agreed value of each item. This protects both parties in the event of a dispute about the condition or quantity of goods delivered.
Parties in United Kingdom should prepare a Consignment Agreement (UK) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your Consignment Agreement (UK)
A well-drafted Consignment Agreement for use in England and Wales should contain a number of essential provisions that protect both the Consignor's ownership interest in the goods and the Consignee's right to earn commission on sales.
The consigned goods clause identifies the specific goods being placed on consignment with sufficient precision to avoid any later dispute about what is and is not covered by the agreement. The parties should prepare a consignment inventory schedule at the time of delivery, recording each item, its description, and its agreed value.
The title retention clause is fundamental to the consignment arrangement. It must clearly state that title to the goods remains with the Consignor at all times until the goods are sold to a third-party customer, and that the Consignee holds the goods as bailee. This protects the Consignor's ownership in the event of the Consignee's insolvency.
The sale price clause specifies the price or pricing basis at which the Consignee is authorised to sell the goods, and whether the Consignee has any discretion to offer discounts. The Consignee should not be permitted to sell below a minimum price without the Consignor's written consent.
The commission clause specifies the rate of commission (expressed as a percentage of the sale price, or as a fixed amount per item) that the Consignee will earn on each sale. The basis for calculating the commission (gross sale price or net sale price after VAT) should be clearly stated.
The payment clause specifies when and how the Consignee will remit net proceeds (sale price less commission) to the Consignor, the accounting and reporting obligations, and the consequences of late payment under the Late Payment of Commercial Debts (Interest) Act 1998.
The care and custody clause sets out the Consignee's obligations to store and protect the goods, and the consequences of loss or damage while the goods are in the Consignee's possession.
The insurance clause (where applicable) requires the Consignee to maintain insurance coverage for the full replacement value of the consigned goods while they are in its possession.
The term and return clause specifies the duration of the consignment period, the notice required to terminate the agreement, and the arrangements for returning unsold goods to the Consignor at the end of the period or on termination.
The governing law and jurisdiction clause confirms England and Wales.
Additional compliance elements for a Consignment Agreement (UK) used in United Kingdom include: Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Forms-legal.com provides this template as a starting point for United Kingdom-compliant documentation.
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Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Consignment Agreement (UK) (United Kingdom) [Legal document template]. Forms Legal. https://forms-legal.com/uk/business/contracts/consignment-agreement-uk
"Consignment Agreement (UK) (United Kingdom)." Forms Legal, 2026, https://forms-legal.com/uk/business/contracts/consignment-agreement-uk.
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title = {Consignment Agreement (UK) (United Kingdom)},
year = {2026},
howpublished = {\url{https://forms-legal.com/uk/business/contracts/consignment-agreement-uk}},
note = {Free legal document template. Based on Companies Act 2006}
}Also available for these jurisdictions:
Frequently Asked Questions
A consignment arrangement is a commercial arrangement under which the owner of goods (the Consignor) delivers those goods to a reseller (the Consignee) for the purpose of sale, while retaining legal title to the goods until they are actually sold to a third-party customer. The Consignee does not purchase the goods from the Consignor upfront; instead, it holds the goods on the Consignor's behalf and earns a commission on each sale. Any goods that remain unsold at the end of the consignment period are returned to the Consignor. Under English law, the consignment arrangement is governed primarily by general contract law and agency law principles. The Consignee acts as a sales agent of the Consignor in relation to the goods, although this must be carefully structured to determine whether the mandatory protections of the Commercial Agents (Council Directive) Regulations 1993 (SI 1993/3053) apply. A consignment agreement is used in many sectors in England and Wales, including art galleries (consigning original artworks for sale), antique dealers, fashion retail, specialty food and drink distribution, and craft markets. The agreement must clearly specify the commission rate, the authorised sale price, the payment terms for remitting proceeds to the Consignor, the care obligations of the Consignee, what insurance is required, and the procedure for returning unsold goods.
Yes. One of the defining features of a consignment arrangement under English law is that legal title to the goods remains with the Consignor throughout the consignment period, until the goods are actually sold to a third-party purchaser. Under the Sale of Goods Act 1979 (SGA 1979), the general rule is that property (i.e. title) in specific goods passes when the parties intend it to pass, and the intention of the parties in a consignment arrangement is clearly that title remains with the Consignor. The Consignee holds the goods as a bailee, owing a duty of care to preserve the goods in their condition and to return them to the Consignor if not sold. This title retention has important practical consequences. First, if the Consignee becomes insolvent, the goods held on consignment should not form part of the Consignee's estate available for distribution to its creditors, provided that the goods are clearly identifiable as the Consignor's property (e.g. by maintaining a separate inventory and clear labelling). Second, the Consignee cannot pledge or encumber the goods because it does not own them. To protect against the risk of insolvency, the Consignment Agreement should require the Consignee to maintain a separate inventory of consigned goods, to keep them physically separated from its own stock, and to confirm they are clearly identified as belonging to the Consignor. Maintaining adequate records is critical to enable the Consignor to assert its title in an insolvency situation.
The Commercial Agents (Council Directive) Regulations 1993 (SI 1993/3053) (the Commercial Agents Regulations) implement the EU Commercial Agents Directive and provide mandatory protections for self-employed commercial agents who have continuing authority to negotiate or conclude the sale of goods on behalf of a principal. The protections include mandatory minimum notice periods, the right to commission on transactions concluded during the agency, and a right to an indemnity or compensation on termination. Whether the Commercial Agents Regulations apply to a consignment arrangement depends on the specific facts of the arrangement. A key requirement is that the agent must be self-employed (not an employee) and must have authority to negotiate or conclude sales in the name of the principal (i.e. in the Consignor's name). In a typical consignment arrangement, the Consignee sells goods in its own name to customers, enters into its own contracts with customers, and takes responsibility for the sale transaction itself. In this case, the Consignee is acting as a distributor (reselling in its own name) rather than as a commercial agent (concluding contracts on the Consignor's behalf), and the Commercial Agents Regulations would generally not apply. However, if the Consignment Agreement is structured such that the Consignee concludes sales in the Consignor's name, acts as the Consignor's representative, or formally contracts with customers on behalf of the Consignor, the Commercial Agents Regulations may apply.
As a general principle under English law, a bailee (in this case the Consignee) owes a duty of care to the bailor (the Consignor) to take reasonable care of the goods entrusted to it. If the Consignee fails to exercise reasonable care and the goods are damaged as a result, the Consignee will be liable to the Consignor for the loss or damage. The standard of care required is that which a reasonably careful person in the Consignee's position would exercise. In a commercial consignment, the Consignee should be held to a relatively high standard of care, particularly where the consigned goods are valuable. The Consignment Agreement should make the allocation of risk explicit. Common approaches include: (a) placing the risk of loss or damage on the Consignee throughout the consignment period, with liability calculated by reference to the agreed consignment value of the affected items; (b) requiring the Consignee to insure the goods against all risks (fire, theft, accidental damage, etc.) for their full replacement value; and (c) allowing the Consignor to periodically inspect the goods and the Consignee's storage facilities. Where the goods are particularly valuable (for example, original artworks, jewellery, or rare collectibles), the Consignor should insist on a requirement that the Consignee maintains adequate insurance, and should request evidence of such insurance before placing goods with the Consignee.
The VAT treatment of consignment arrangements in the United Kingdom is governed by the Value Added Tax Act 1994 and HMRC guidance, and can be complex. The key principle is that a supply for VAT purposes occurs when goods are sold from the Consignee to the end customer. The Consignor does not make a VAT supply to the Consignee merely by delivering goods on consignment, because title does not pass at that stage. When the Consignee sells the goods to a customer, a supply occurs from the Consignor to the Consignee (at the consignment value) and a supply from the Consignee to the customer (at the retail price) simultaneously, or the transaction may be structured as a direct supply from the Consignor to the customer through the Consignee as agent. The exact VAT analysis depends on whether the Consignee is acting as principal (buying and reselling) or as agent (concluding the sale on the Consignor's behalf). If both the Consignor and Consignee are VAT-registered, VAT must be correctly accounted for on both transactions. The commission earned by the Consignee is subject to VAT as a supply of services. Given the complexity of VAT in consignment arrangements, both parties should take advice from a VAT specialist or HMRC to confirm correct treatment, particularly for higher-value consignment businesses.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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