A consignor is a person or entity that sends goods to another party, known as the consignee, for the purpose of selling those goods on commission. The consignor retains ownership of the goods until they are sold. If the consignee faces bankruptcy or financial difficulties, the consignor has the right to reclaim the goods while they are still in transit.
The term "consignor" is commonly used in commercial law, particularly in transactions involving the sale of goods. It is relevant in areas such as contract law and bankruptcy law. When engaging in consignment agreements, parties may utilize legal forms to outline the terms of the arrangement, including the rights and responsibilities of both the consignor and consignee. Users can find templates for these agreements on platforms like US Legal Forms, which provide resources drafted by legal professionals.
Here are a couple of examples of abatement:
Example 1: A local artist sends several paintings to a gallery on consignment. The gallery agrees to sell the paintings and take a commission on each sale. If the gallery faces financial issues, the artist can reclaim the unsold paintings.
Example 2: A clothing manufacturer ships a batch of apparel to a retailer under a consignment agreement. If the retailer goes bankrupt, the manufacturer can stop the shipment and retrieve the remaining inventory. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Key Differences |
|---|---|
| California | Consignment agreements must be in writing to be enforceable. |
| New York | Specific disclosure requirements exist for consignment sales. |
| Texas | Consignors may have additional rights in bankruptcy proceedings. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Consignee | The party receiving goods on consignment to sell. | The consignee does not own the goods and acts on behalf of the consignor. |
| Sale on Approval | A transaction where the buyer can return goods after evaluating them. | Ownership transfers only if the buyer decides to keep the goods. |
If you are a consignor, ensure that you have a clear, written agreement with your consignee that outlines the terms of the consignment, including commission rates and rights regarding unsold goods. If issues arise, such as the consignee's bankruptcy, you may need to act quickly to reclaim your goods. Consider utilizing legal templates from US Legal Forms to draft your consignment agreements. If your situation is complex, seeking legal advice may be beneficial.
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A consignor is someone who sends goods to another party for sale while retaining ownership until the goods are sold.