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Simple Consignment Agreement for United Arab Emirates

Simple Consignment Agreement Template for United Arab Emirates

This document is a Simple Consignment Agreement governed by UAE law, designed to establish a commercial arrangement where one party (the consignor) places goods in the possession of another party (the consignee) for sale, while retaining ownership until the goods are sold. The agreement complies with UAE Federal Laws, including the Civil Code and Commercial Code, and addresses key aspects such as delivery terms, pricing, commission structures, payment arrangements, and risk allocation. It provides a comprehensive framework for consignment relationships while ensuring compliance with UAE commercial regulations and business practices.

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What is a Simple Consignment Agreement?

The Simple Consignment Agreement is essential for businesses operating in the UAE market who wish to establish a consignment sales arrangement. This document is particularly useful when a supplier wants to place goods with a retailer or dealer while maintaining ownership until final sale. The agreement, governed by UAE law, includes crucial provisions for handling, storing, and selling consigned goods, commission structures, and payment terms. It ensures compliance with UAE Federal Laws, including the Civil Code (Federal Law No. 5 of 1985) and Commercial Code (Federal Law No. 18 of 1993), while providing flexibility for various commercial arrangements. The document is commonly used in retail, wholesale, and distribution sectors, offering protection for both consignor and consignee interests.

What sections should be included in a Simple Consignment Agreement?

1. Parties: Identification of the Consignor and Consignee with full legal names and addresses

2. Background: Brief context of the arrangement and purpose of the agreement

3. Definitions: Key terms used throughout the agreement including 'Consigned Goods', 'Consignment Period', 'Commission', etc.

4. Appointment and Scope: Terms of appointment of the consignee and scope of consignment arrangement

5. Delivery and Receipt of Goods: Process and requirements for delivery and acceptance of consigned goods

6. Title and Risk: Clarification that title remains with consignor while goods are in consignee's possession

7. Pricing and Commission: Agreed pricing structure for goods and commission rates for the consignee

8. Payment Terms: Terms for payment collection and remittance to the consignor

9. Reporting and Accounting: Requirements for sales reporting and accounting of consigned goods

10. Storage and Maintenance: Requirements for storage, handling, and maintenance of consigned goods

11. Term and Termination: Duration of agreement and conditions for termination

12. General Provisions: Standard legal provisions including governing law, notices, and dispute resolution

What sections are optional to include in a Simple Consignment Agreement?

1. Insurance: Required when specific insurance arrangements need to be detailed

2. Marketing and Display: Include when specific requirements exist for product display and marketing

3. Exclusivity: When exclusive rights are granted for specific territories or products

4. Returns and Unsold Goods: Include when specific procedures for handling returns and unsold goods are needed

5. Quality Control: When specific quality standards or inspection rights need to be maintained

6. Intellectual Property: Include when use of trademarks or other IP rights needs to be addressed

7. Confidentiality: When specific confidentiality obligations need to be detailed

8. Force Majeure: When specific force majeure provisions are required beyond standard provisions

What schedules should be included in a Simple Consignment Agreement?

1. Schedule 1 - Consigned Goods: Detailed list of products including specifications and quantities

2. Schedule 2 - Pricing Structure: Detailed pricing information and commission calculations

3. Schedule 3 - Operating Procedures: Detailed procedures for handling, storage, and sales of goods

4. Schedule 4 - Reporting Templates: Standard forms for sales reporting and inventory tracking

5. Schedule 5 - Territory Definition: Detailed description of authorized sales territory if applicable

6. Appendix A - Storage Requirements: Specific requirements for storage conditions and handling

7. Appendix B - Quality Standards: Detailed quality standards and inspection procedures if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Publisher

Genie AI

Document Type

Contract to Sell

Cost

Free to use

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