What is a consignment agreement?

A consignment agreement is a written article between a consignor and a consignee created for the purpose of selling goods to a third party, according to LegalVision. The consignor holds true ownership of the goods until they are sold, while the consignee keeps the goods in his possession for selling.

Consignment agreements are generally written up when dealing with high-priced items, or when the consignee is unable to pay for the items until sold to the consumer, explains LegalVision. The consignor retains the right to repossess his goods from the consignee at any time, subject to the terms and agreements of the consignment agreement.