Is an electronic signature valid?

Yes. Electronic signatures are legally enforceable under the ESIGN Act (15 U.S.C. §7001) for interstate transactions and under state UETA statutes for intrastate agreements; ensure intent, consent, attribution, and retention to meet the four-part e-sign validity test.

When is notarization required?

Notarization is generally not required for consignment agreements but may be chosen for evidentiary weight or if a contract includes property-transfer elements; verify whether specific state or transactional rules impose notarization for related exhibits.

Can I use remote online notarization (RON)?

Often yes where state law permits permanent RON; requirements include identity proofing, multi-factor authentication, and audio-video session retention. Confirm authorization and technical standards with the applicable state notary commission before relying on RON.

Who must sign the agreement?

An authorized representative for each legal entity must sign, with printed name, title, and date included. For sole proprietors, use the individual's full legal name and provide tax identifiers if required for payer reporting.

How do I cancel a consignment agreement?

Follow the termination clause: serve the required notice, reconcile outstanding sales and deductions, return unsold inventory per contract terms, and document cancellation in writing signed by both parties to prevent later disputes.

How long should I keep consignment records?

Retain records through the active term plus recommended post-termination periods: at least three years for tax purposes (IRC §6501(a)), seven years for commercial disputes, and six years for HIPAA-related records where applicable (45 CFR §164.530(j)).

Electronic Signature
Templates
Sales
Sales Consignment Agreement

Sales Consignment Agreement

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SALES CONSIGNMENT AGREEMENT

This Sales Consignment Agreement (the Agreement) is made effective as of by and between:

Consignor (Owner)

Consignor Name Consignor Address

Consignee (Retailer)

Consignee Name Consignee Address

Recitals

Consignor is the lawful owner of certain goods and desires to place such goods on consignment with Consignee for sale to the public. Consignee agrees to accept and sell the goods on the terms and conditions set forth in this Agreement.

Term

The term of this Agreement shall commence on the date set forth above and shall continue for months unless earlier terminated in accordance with Section Termination below.

Goods and Inventory

Consignor shall deliver the goods listed below (the Goods) to Consignee on consignment. The Parties may attach additional inventory schedules as exhibits which shall be incorporated by reference.

Item #	Description	SKU	Quantity	Unit Price	Total
1
2
3

Subtotal Taxes Shipping Total

Commission and Payment

Consignee shall pay Consignor the net proceeds of sales of the Goods less a commission equal to (the Commission). Commission is calculated on the gross sale price excluding sales taxes and shipping charges.

Payment to Consignor shall be made within days after the end of the reporting period in which the Goods were sold. Late payments shall bear interest at per month, or the maximum permitted by law, whichever is less.

Accepted Payment Methods

Cash Check Credit/Debit Card Wire Transfer

Delivery, Risk of Loss, and Title

Consignor shall deliver the Goods to Consignee at Consignee's premises or other mutually agreed location. Risk of loss or damage to the Goods shall remain with Consignee while the Goods are in Consignee's possession, custody or control. Title to the Goods shall remain with Consignor until sold to a third party by Consignee, except as otherwise required by applicable law.

Delivery Method / Shipping Terms

Insurance and Care of Goods

Consignee shall at all times keep the Goods insured against theft, loss and damage for their full replacement value and shall provide evidence of insurance upon request. In the event of loss, theft, or damage while the Goods are in Consignee's custody, Consignee shall promptly notify Consignor and shall either (a) pay Consignor the insured or agreed value of the Goods, or (b) repair or replace the Goods at Consignee's expense.

Insurance Carrier Policy Number

Records, Accounting and Reports

Consignee shall maintain complete and accurate records of all sales, returns, discounts, and other transactions relating to the Goods. Consignee shall deliver to Consignor periodic statements of sales and remittances in accordance with the reporting frequency selected below.

Reporting Frequency

Monthly Quarterly Upon each sale

Additional Reporting Instructions

Returns, Unsold Goods and Buyback

Unsold Goods may be returned to Consignor upon written request by Consignor after days from delivery. Unless otherwise agreed in writing, Consignee may return unsold Goods at Consignor's expense if returned in original condition; otherwise, return shipping costs shall be borne by the party causing the deterioration.

Return / Buyback Instructions

Representations, Warranties and Covenants

Consignor represents and warrants that it is the lawful owner of the Goods, that the Goods are free from undisclosed liens and encumbrances, and that Consignor has full authority to consign the Goods. Consignee represents and warrants that it will handle the Goods in a commercially reasonable manner and comply with all applicable laws and regulations in the sale of the Goods.

Indemnification and Limitation of Liability

Each party shall indemnify, defend and hold harmless the other party from and against any claims, liabilities, losses, damages, costs and expenses (including reasonable attorneys' fees) arising out of its breach of this Agreement, negligence or willful misconduct. EXCEPT FOR A PARTY'S WILLFUL MISCONDUCT OR GROSS NEGLIGENCE, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR CONSEQUENTIAL, INCIDENTAL, EXEMPLARY OR PUNITIVE DAMAGES.

Termination

Either party may terminate this Agreement upon days' prior written notice to the other party. Upon termination, Consignee shall return to Consignor, at Consignor's direction, all unsold Goods and outstanding records, and shall remit any amounts due under this Agreement in accordance with the Payment section.

Notices

All notices required or permitted under this Agreement shall be in writing and delivered to the addresses set forth below or such other address as a party may designate in writing.

Consignor Contact Consignee Contact

Governing Law and Dispute Resolution

This Agreement shall be governed by and construed in accordance with the laws of the state of without regard to its conflict of laws principles. The parties shall first attempt to resolve disputes by good faith negotiation. If negotiation fails, disputes shall be resolved by binding arbitration administered in accordance with the parties' agreement to arbitrate.

Arbitration Agreement

The parties agree to binding arbitration of disputes arising out of this Agreement.

Miscellaneous

This Agreement constitutes the entire agreement between the parties with respect to the consignment of the Goods and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written. Any amendment to this Agreement must be in writing and signed by both parties.

Additional Terms

Consignor - Print Name:

By:

Date:

Consignee - Print Name:

By:

Date:

What a Sales Consignment Agreement Is

Sales Consignment Agreement is a contract where an owner (consignor) delivers goods to a reseller (consignee) to sell on the consignor's behalf, with title typically retained by the consignor until sale. The agreement sets terms including inventory description, pricing, commission or fee structure, payment timing, returns, and termination conditions. It allocates risk for loss, theft, or damage and specifies reporting, inspection, and accounting procedures. Parties may include warranties, indemnities, and governing law clauses. This document helps clarify responsibilities and cash flow expectations between supplier and reseller.

Why a Clear Consignment Agreement Matters

Use a Sales Consignment Agreement to define resale rights, payment timing, and liability allocation, reducing disputes and improving inventory control. It protects consignor ownership while enabling consignee sales, documents agreed commissions, and creates clear processes for returns, reporting, and termination.

Common Parties and Use Cases

Typical users include manufacturers, independent artisans, small wholesalers, and specialty retailers that manage third-party inventory.

Manufacturers: outsource retail distribution without transferring title; retain control over pricing and inventory.
Artisans and crafters: place goods in boutiques or galleries to reach customers without wholesale commitments.
Retailers and consignment shops: expand product range while offering sales reporting and agreed commission splits.

Successful consignment arrangements depend on clear accounting, timely reporting, and mutually agreed sales terms.

Core Sections to Include in the Agreement

Essential sections in a Sales Consignment Agreement set rights, payment mechanics, inventory control, termination, liability, and dispute resolution to reduce ambiguity and legal risk.

Parties

Identify consignor and consignee with full legal names, addresses, contact details, and authorized signatories; specify any affiliate relationships and authority limits for signing or inventory adjustments.

Goods Description

Describe items by SKU, quantity, condition, serial numbers, and packaging; include photographs or exhibits for high-value goods and define acceptable substitutions or returns policies.

Payment Terms

State timing and method for disbursing proceeds, schedule for reconciliations, thresholds for minimum payouts, and procedures for withheld or disputed funds.

Commission & Fees

Specify commission rates, fixed fees, chargebacks, restocking costs, and who pays shipping or handling; describe adjustments for discounts, promotions, and refunds.

Risk & Insurance

Allocate responsibility for loss, theft, or damage during storage or transit; require insurance minimums or indemnities and name certificate holders where applicable.

Reports & Audits

Require periodic sales reporting, inventory counts, access for audits, record retention terms, and the format and frequency of reconciliation statements.

Required Data Fields at a Glance

Consignor Name: Full legal entity or individual name

Consignee Name: Full legal entity or DBA name

Addresses: Street, city, state, ZIP

Inventory List: SKU, quantities, condition, serial numbers

Payment Details: Bank account or payment schedule specifics

Effective Date: MM/DD/YYYY format; start of obligations

Step-by-Step: Completing the Agreement

Follow these steps to complete and execute a Sales Consignment Agreement accurately and maintain compliant records.

01

Prepare Document: Gather item list, pricing, and party details.
02

Review Terms: Agree on commission, returns, and insurance obligations.
03

Sign & Notarize: All authorized signers sign; notarize if required.
04

Distribute Copies: Provide executed copies and set reporting schedule.

Configuring an Online Consignment Workflow

Configure an online consignment workflow to automate field population, signature order, authentication, and delivery to accounting systems.

Field	Configuration
Signature Order	Consignor then consignee then witness
Authentication	Email plus SMS OTP or KBA option
Conditional Fields	Show expiration or return fields when set
Integration	Send copies to accounting or inventory systems

Technical Requirements for eSigning and Delivery

Digital signing speeds execution and enables secure distribution, but requires compatible file formats and signer authentication.

File Types: PDF, DOCX, and image support
Authentication: Email, SMS OTP, KBA, or SSO
Integrations: Connects to CRM, ERP, cloud storage

Where to Send and How Processing Works

Typical routing describes where to send executed consignment agreements, who receives copies, and how accounting and inventory are updated.

Upload Document: Sender uploads agreement and attachments to signing platform.
Place Fields: Add signature, date, and conditional inventory fields.
Assign Signers: Add consignor, consignee, and optional witness emails.
Deliver & Archive: Distribute signed PDFs and push records to storage.

Key Deadlines and Timing Considerations

Key timing items include providing W-9 on request, payment schedules, reporting dates, and notice periods for termination or inventory recall.

Provide W-9:

Supply W-9 to payers upon request to avoid backup withholding.

Payment Schedule:

Specify when proceeds are disbursed after sale (e.g., 30 days).

Sales Reports:

Monthly or quarterly reporting deadlines for reconciliations.

Return Window:

Timeframe for consignee to return unsold or damaged goods.

Termination Notice:

Notice period required before ending the consignment relationship.

Milestones from Delivery to Final Settlement

Sequence the consignment lifecycle into clear milestones from delivery through final reconciliation and payment to simplify operations.

01

Inventory Delivery

Consignor transfers listed goods to consignee and documents receipt.

02

Sales Period

Consignee markets and sells items per agreed terms and price schedule.

03

Reconciliation

Parties reconcile sales, returns, and deductions at agreed intervals.

04

Final Settlement

Consignee remits net proceeds and returns unsold inventory per contract.

Common Preparation Mistakes to Avoid

Failing to specify the exact inventory details leads to disputes over quantities, condition, or value and complicates returns and insurance claims.
Vague payment language about timing, deductions, or chargebacks can delay remittances and trigger audit issues or backup withholding from payers.
Not defining insurance responsibilities or acceptable loss allocation forces parties to litigate when damage or theft occurs during consignment.
Missing signature authority or unsigned amendments can render a consignment arrangement unenforceable or invalidate critical changes to terms.

Short List of Legal & Financial Risks

Backup Withholding: 24% withholding if incorrect TIN

Information Return Penalty: IRC §6721 penalties for late filing

I-9 Violations: Penalties $281–$2,789 per violation

Insurance Gaps: Losses uninsured may be unrecoverable

Title Risk: Confused ownership hinders recovery

Enforceability Risk: Unsigned agreements risk invalidation

eSignature Pricing and Feature Comparison

Compare eSignature vendor pricing and common features relevant for executing and storing Sales Consignment Agreements across typical enterprise and SMB plans.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently Asked Questions

Common questions address enforceability, electronic signing, notarization, signatures authority, cancelling consignment arrangements, and document retention best practices.

Need help? Contact support

Is an electronic signature valid?
Yes. Electronic signatures are legally enforceable under the ESIGN Act (15 U.S.C. §7001) for interstate transactions and under state UETA statutes for intrastate agreements; ensure intent, consent, attribution, and retention to meet the four-part e-sign validity test.
When is notarization required?
Notarization is generally not required for consignment agreements but may be chosen for evidentiary weight or if a contract includes property-transfer elements; verify whether specific state or transactional rules impose notarization for related exhibits.
Can I use remote online notarization (RON)?
Often yes where state law permits permanent RON; requirements include identity proofing, multi-factor authentication, and audio-video session retention. Confirm authorization and technical standards with the applicable state notary commission before relying on RON.
Who must sign the agreement?
An authorized representative for each legal entity must sign, with printed name, title, and date included. For sole proprietors, use the individual's full legal name and provide tax identifiers if required for payer reporting.
How do I cancel a consignment agreement?
Follow the termination clause: serve the required notice, reconcile outstanding sales and deductions, return unsold inventory per contract terms, and document cancellation in writing signed by both parties to prevent later disputes.
How long should I keep consignment records?
Retain records through the active term plus recommended post-termination periods: at least three years for tax purposes (IRC §6501(a)), seven years for commercial disputes, and six years for HIPAA-related records where applicable (45 CFR §164.530(j)).

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