CONSIGNMENT AGREEMENT

by | Mar 23, 2024 | Agreements

THIS AGREEMENT is hereby entered into on this ………………day of …….……………. Two Thousand and ……………………………

    BETWEEN

1.ECOMMERCE COMPANY ABC, a single owner limited liability company established and existing in FFFF, hereinafter referred to as (“Consignee”)

AND

  1. RETAIL BRAND XYZ, a Freezone company, established and existing in HHHH,  hereinafter referred to as (“Consignor”) collectively referred as the (“Parties”) and individually as a (“Party”).

WHEREAS, Consignor is engaged in the manufacture and sale of shoes; and

WHEREAS, Consignee is engaged in the business of selling shoes through its ecommerce website located at (the “Website”); and

WHEREAS, Consignor desires to consign its products to Consignee for sale on the Website; and

WHEREAS, Consignee desires to sell Consignor’s products on the Website on a consignment basis;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and for other good and valuable consideration, the parties agree as follows:

INTRODUCTION

i)Part 1 of this Agreement set out the key commercial terms.

  1. ii) Part 2 of this Agreement sets out the general terms and conditions agreed between Consignee and Consignor.

PART ONE (1)- KEY COMMERCIAL TERMS

TERRITORY:

Consignor grants Consignee the right to sell and distribute the following product(s) within the following territory: Shoes in the KKKK ,  (subject to permissibility under the diplomatic/political/regulatory environment) and any additional countries identified on the ECOMMERCE COMPANY ABC’S website at  or as mutually agreed in writing from time to time.

PRODUCTS/BRAND:

The product(s) covered by this Agreement shall be shoes under the brand name [BRAND NAME].

PRICING:

Consignee shall be entitled to a commission of twenty-five percent (25%) of the net revenue generated from sales of Consignor’s products on the Website. Net revenue shall mean the amount of revenue received by Consignee from the sale of the products, less any applicable taxes, shipping fees, and chargebacks.

BANK PAYMENT DETAILS

The Consignor’s bank account details are:

Beneficiary Name RETAIL BRAND XYZ
Account Number
IBAN
Currency
Bank NameBranch Address
SWIFT

 

NOTICES

Notices must be addressed as follows:

Party: Consignee Consignor
Name: ECOMMERCE COMPANY ABC RETAIL BRAND XYZ
Address:
Email:

SPECIAL COMMERCIAL TERMS:

During the term of this Agreement, Consignor agrees to participate and finance promotions that offer up to a 20% discount off the selling price of all products. These promotions may be distributed through ECOMMERCE COMPANY’s loyalty platform ‘Rewards,’ influencer campaigns, or any other means, except for direct discounting of the product. In such cases, the commission will be calculated based on the selling price minus the discount amount offered to customers.

Consignor may also participate in and fund promotions from time to time, such as XXXX surprises and White November, where the promotions would offer a higher discount than 20% off the selling price. In such cases, Consignor must provide written confirmation by email indicating the validity period and acceptance of participation.

Consignor may choose to discount products from time to time to promote the movement of older stock or items with lower sales. In such cases, Consignor must provide written confirmation by email indicating the discount amount or percentage. This discount will be applied to Consignee’s customers, and the commission will be calculated based on the selling price minus all discounts and agreed-upon promotions. Once offered, discounts cannot be reduced under ECOMMERCE COMPANY’s customer-first policy.

PART 2 – GENERAL TERMS AND CONDITIONS

1.CONSIGNOR’S OBLIGATIONS:

1.1 The Consignor must make available the Products in the required quantity and specification as communicated to the Consignor by the Consignee for each mutually agreed selection validity period. The Parties must act in good faith to agree on the delivery schedule for the same.

1.2 The Consignor must maintain all licenses, permissions, authorizations, consents, and permits necessary to supply the Products to the Consignee for the entire duration of this Agreement.

1.3 The Consignor must follow the packing guideline instructions described in the Annexure attached to this Agreement.

  1. CONSIGNEE’S RIGHTS & OBLIGATIONS:

2.1 The Consignee shall sell the Products through its website including mobile application platform (“Website”) to customers located in the Territory.

2.2 Not less than 30 days before the commencement of each selection validity period, the Consignee must notify the Consignor of which Products will be listed items for the next selection validity period.

2.3 The Consignee must store the Products supplied by the Consignor in the warehouse of their logistics and delivery partner.

2.4 The Consignee must provide written updates to the Consignor on product performance (including sales and stock position on hand) in the manner and at such frequency as mutually agreed, with a minimum of once a month.

2.5 The Consignee must make every attempt to sell the consigned merchandise as per the pricing terms agreed with the Consignor.

2.6 The Consignee must observe all directions and instructions given to it by the Consignor for any promotion and advertisement of the Products.

  1. ORDER PROCESS:

3.1. The Consignee shall place an Order for any Products it wishes to order. Each Order must:

3.1.1. Be given in writing in the Consignee’s prescribed form via email from

3.1.2. Specify the type and quantity ordered;

3.1.3. Specify the location(s) to which the merchandise is to be delivered if different from that initially agreed;

3.1.4. The Consignee may specify the date by which the Order is to be delivered. If the Delivery Date is to be specified after the placing of an Order, the Consignee must give the Consignor reasonable advance notice of the relevant information.

3.2. The Consignee must assign an individual identifying order number (“Order Number”) to each Order placed by the Consignee. Each Party must use the Order Number to identify each Order from the time at which the Order Number is known to it.

3.3. The Consignor must arrange delivery of the Products in accordance with the details set out in clause 4 below or as set out in the Order form.

3.4. The Consignee shall not be responsible or liable for executing any order, accepting any supply or shipment, or paying any invoice pursuant to an order accepted or acted upon by the Consignor that does not comply particularly with Clause 3.1.1.

  1. DELIVERY:

4.1 The Delivery Location for each Order shall be the warehouse located at No. CCCC, Street XYZ,  HHHH

4.2 The Consignor is responsible for delivering each Order to the Delivery Location mentioned in Clause 4.1 or any other Delivery Location(s) specified in the Order by the Delivery Date. The Consignor must make arrangements for suitable transport to the Delivery Location(s).

4.3 Delivery of an Order will be considered complete only after the Consignor has finished unloading the Order at the Delivery Location(s).

4.4 The Consignor shall provide a delivery note for each Order, containing details such as the Order Number, the Date of the Order, and the Type and Quantity of Listed Items included in the Order. The delivery note will be signed by the Consignee upon delivery.

4.5 The Consignor agrees to leave the merchandise with the Consignee for a period of up to 12 months, which shall be considered the Consignment Period. The Consignee has the right to request the Consignor to take back the goods, depending on their business performance.

4.6 In case any merchandise remains unsold or under-performing at the end of the Consignment Period, and a decision is made to remove and return the said merchandise, the Consignor shall bear the costs of returning the same to them, including shipping and handling expenses.

4.7 Upon the return of the unsold merchandise, the Consignor shall replace it with new merchandise as requested by the Consignee.

4.8 Notwithstanding the terms of the Agreement, the Consignee has the right to return any or all of the unsold Products to the Consignor after the end of the Consignment Period or after the expiry and/or the termination of this Agreement.

  1. TITLE AND RISK:

5.1 The risk in the Products delivered to the Consignee shall pass to them upon delivery at the Delivery Location(s).

5.2 Title to the Products delivered to the Consignee shall pass to them free and clear of any encumbrance or lien upon payment. If title passes to the Consignee before Delivery, the Consignor shall hold such items as an agent for the Consignee.

5.3 The Consignee shall be liable for any loss of or damage to the Product (including materials included in packaging), up to the Product’s selling price less applicable commissions.

  1. ACCEPTANCE AND DEFECTS:

If any Products delivered to the Consignee do not comply with the requirements stated in clause 7 or any other terms of this Agreement due to any latent defects, the Consignee may reject those Products within two (2) weeks from receipt and demand that the Consignor repair or replace the rejected Products at their own risk and expense within one (1) week of being notified of the rejection. The Consignor shall replace or issue credit for the defective product(s).

  1. MANUFACTURE AND QUALITY:

7.1 The Consignor shall manufacture, package, and supply the Products in compliance with the highest industry standards.

7.2 The Consignor guarantees, in all material respects, that:

7.2.1 The Products will conform to the agreed-upon specifications and correspond to all samples or descriptions provided to the Consignee;

7.2.2 The Products will be of satisfactory quality and suitable for any purpose held out by the Consignor or made known to the Consignor by the Consignee;

7.2.3 The Products will be made of good materials and free from defects in design, material, and workmanship;

7.2.4 The Products will not infringe any third-party Intellectual Property Rights, whether in the KKKK or anywhere else in the world.

  1. RECORDS:

During the Term of this Agreement, both Parties shall maintain records of the financial and fiscal information related to the Products, and shall share reasonable information related to the business performance of the Products and marketing of the products as required.

  1. PAYMENT TERMS:

9.1 The Consignor shall send an invoice for the sold products to the Consignee on a monthly basis. The Consignee shall make a wire transfer to the bank account specified in Clause 2, Part 1, for the agreed-upon price within thirty (30) days of receiving the relevant invoice. The Consignor shall bear the cost of all unsold merchandise returned.

9.2 The Consignor’s invoices shall clearly indicate the amount of any applicable VAT charged on the amounts payable by the Consignee under this Agreement. Each Party shall be responsible for its own duties and taxes in relation to the transactions conducted under this Agreement.

9.3 Value Added Tax:

9.3.1 “VAT” shall refer to the Value Added Tax imposed by Federal Decree-Law No. (8) of 2017. “Valid Tax Invoice” shall refer to a VAT invoice that meets all the requirements of the Executive Regulations on Federal Decree-Law No. (8) to the UAE VAT law. “Tax Credit Note” shall refer to a VAT credit note that meets all the requirements of the Executive Regulations on Federal Decree-Law No. (8) to the UAE VAT law.

9.3.2 The Parties agree that any amount referred to in this Agreement is a reference to that amount expressed on a VAT exclusive basis, unless indicated otherwise.

9.3.3 If any supply made under or in connection with this Agreement is subject to VAT, the consideration to be provided under this Agreement for that supply shall be increased by an amount equal to the VAT exclusive consideration (or its VAT exclusive market value if applicable) multiplied by the rate of VAT applicable to that supply.

9.3.4 If the Consignor has issued a tax invoice to the Consignee, the Consignee shall pay the additional amount payable under clause 9.3.3 to the Consignor at the same time as the VAT exclusive consideration is otherwise required to be provided. If the Consignor has not issued a Valid Tax Invoice under the relevant VAT law prior to the time the VAT exclusive consideration is payable, the Consignee shall pay the additional amount under clause 9.3.3 to the Consignor upon receipt of a Valid Tax Invoice.

9.3.5 To the extent any of the consideration for a supply made under or in connection with this Agreement is non-monetary, the Parties shall treat the amount of non-monetary consideration as exclusive of VAT. The VAT amount payable for the supply shall be paid upon receipt of a Valid Tax Invoice under the relevant VAT law or at such other time agreed between the Parties.

9.3.6 In case of any adjustment event related to any taxable supply made under or

connection with this Agreement, the Consignor shall determine the net VAT in relation to the supply (taking into account any adjustment), and if the net VAT differs from the amount previously paid under clause 9.3.3 or otherwise included in any consideration expressed to be inclusive of VAT, the Consignee shall be refunded or credited the amount of the difference, or shall pay the Consignor the additional amount, as applicable. The Consignor shall issue a Tax Credit Note to the Consignee in such cases.

  1. CONFIDENTIALITY:

10.1 Both Parties agree to keep any confidential information provided by the other Party strictly confidential, both during the Term of this Agreement and after the Termination Date. The information shall not be used for any purpose other than in connection with the performance of obligations under this Agreement, except as permitted by clause 10.2.

10.2 Either Party may disclose any Confidential Information or related matters to those of its officers, employees, professional advisers, and consultants who need to know about the Confidential Information in connection with this Agreement, or as required by any Law or Competent Authority.

10.3 The provisions of this clause shall remain in effect even after the termination of this Agreement to the extent that they remain relevant.

  1. LIABILITY AND REMEDY:

11.1 The Consignor is responsible for timely and proper performance of its obligations under this Agreement, and shall be liable to the Consignee for any resulting damages.

11.2 The Consignee is liable for any damage to or loss of the Consignor’s property arising from the performance or non-performance of the Consignee’s obligations under this Agreement.

11.3 Each Party shall indemnify and hold the other Party harmless from any claims, costs, damages, or liabilities arising from the indemnifying Party’s fraud, gross misconduct, or infringement of intellectual property rights due to the indemnifying Party’s act or omission.

11.4 No Party shall be liable for any indirect, special, or consequential damages.

11.5 Notwithstanding clause 11.3, the total liability of any Party relating to this Agreement shall be limited to the price of the Products that gave rise to the claim.

  1. TERMINATION:

12.1 This Agreement shall be in effect for one (1) year from the date of this Agreement, unless terminated earlier in accordance with the terms of this Agreement. Thereafter, this Agreement shall automatically renew for successive one-year terms unless terminated earlier in accordance with the terms of this Agreement.

12.2 Either Party may terminate this Agreement by giving written notice of not less than thirty (30) days to the other Party. The Parties acknowledge that no court order will be required for termination for convenience.

12.3 Either Party may terminate this Agreement immediately upon written notice to the other Party if that other Party:

12.3.1 Experiences an insolvency event or a change of control; or

12.3.2 Is prevented by applicable law from being a party to, exercising its rights in relation to, or performing its obligations under this Agreement; or

12.3.3 Is in material breach of this Agreement, and either the breach cannot be remedied, or it has not been remedied within 30 days after the defaulting Party received written notice specifying the breach and requiring its remedy.

  1. REPRESENTATIONS:

13.1 The Consignor warrants and represents that it is either the owner of the intellectual property rights (IPR) embodied in the Products or has the legal right to grant a license to the Consignee to sell and promote the Products on its website, www.ECOMMERCE COMPANY-ABC.com, within the Territory. The Consignor further warrants that, as of the date of this Agreement, it has no knowledge of any claim of IPR infringement arising from the sale, manufacture, or use of the Products.

13.2 Each Party shall comply with all applicable policies, codes, laws, and regulations relating to anti-corruption and anti-bribery. Each Party shall also ensure that persons associated with it or other persons who are performing any obligations on behalf of it in connection with this Agreement comply with such policies, codes, laws, and regulations.

  1. CROSS-LISTING:

The Consignor agrees that:

14.1 The Consignee is authorized to cross-list the Products on Noon.com for marketing and sale in any Territory.

14.2 The term “Website” shall include Noon.com (website and mobile application) for the cross-listing of Products.

14.3 The intellectual property rights licensed by the Consignor to the Consignee under this Agreement shall extend to and apply to the cross-listing of Products.

14.4 The Consignor warrants and represents that the marketing and sale of the cross-listed Products on Noon.com do not and will not infringe any third party’s rights, including intellectual property rights.

  1. GOVERNING LAW AND DISPUTE:

Any dispute or claim arising out of or in connection with the formation or subject matter of this Agreement shall be governed by and construed in accordance with the laws of the Emirate of Dubai, United Arab Emirates. The parties agree that any dispute, controversy, difference, or claim arising out of or in connection with this Agreement shall be referred to the courts of Dubai.

  1. INDEMNIFICATION:

16.1Consignor agrees to indemnify, defend, and hold harmless Consignee and its affiliates, directors, officers, employees, agents, successors, and assigns, from and against any and all claims, liabilities, damages, losses, costs, expenses (including reasonable attorneys’ fees), or obligations arising out of or related to

16.1.1 any breach of this Agreement by Consignor.

16.1.2 Any claim that the Products infringe or misappropriate the intellectual property rights    of any third party.

  • Any claim that the Products cause bodily injury or death or damage to property.
  • Any claim related to Consignor’s negligence or willful misconduct in the manufacture, sale, or distribution of the Products. Consignee shall provide prompt notice to Consignor of any such claim or suit and shall cooperate with Consignor, at Consignor’s expense, in the defense of any such claim or suit. Consignor shall have the right to control the defense of any claim or suit, including the selection of counsel, provided that any settlement that would require Consignee to admit liability or pay any money shall require Consignee’s prior written consent.
  1. MISCELLANEOUS:

17.1 The Parties shall perform their obligations under this Agreement as independent contractors. Nothing in this Agreement shall be construed as creating a principal-agent, employer-employee, franchisor-franchisee, partnership, joint venture, co-ownership, or any other relationship between the parties.

17.2 No amendment to this Agreement shall be effective unless it is in writing and signed by both Parties.

17.3 A waiver of any right or remedy under this Agreement or by law is only effective if it is given in writing and shall not be deemed a waiver of any subsequent breach or default.

17.4 Neither Party may assign or transfer its rights to a third party without the written consent of the other Party. However, the Consignor acknowledges and agrees that the Consignee may coordinate with and use the services of personnel from its affiliated companies within the Territory in connection with its e-commerce activities under this Agreement.

17.5 Neither Party shall be in breach of this Agreement or otherwise liable for any failure or delay in performance resulting from a force majeure event, provided that the affected Party promptly gives written notice of such Force Majeure Event to the other Party and takes all reasonable steps to mitigate the effects of the Force Majeure Event. If a Force Majeure Event extends for more than thirty (30) days in the aggregate, either Party may immediately terminate this Agreement by providing written notice to the other Party.

17.6 This Agreement, together with any Annexures attached to it, constitutes the entire Agreement between the Parties. If there is any discrepancy between any Annexure and a provision in the main body of this Agreement, the Annexure shall prevail and be binding.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

SIGNED by the parties:                                                )

…………………………….                                                     ) _________________

(ECOMMERCE COMPANY ABC -CONSIGNEE)             Signature

Title: ………………………..

Date: ……………………….

AND

………………………………..                                                 )_________________

(RETAIL BRAND XYZ -CONSIGNOR)                            Signature

Title: ………………………..

Date: ……………………….

ANNEXURE

Packing Guidelines for Vendors

Below mentioned instructions must be followed by the Consignor

# PACKING AND PRODUCT ACCEPTANCE INSTRUCTION
1. All items should be segregated and packed in boxes by PO
2. 1 SKU should not be packed across multiple boxes
3. Qty/PO should be mentioned on all the boxes
4. Similar items which needs to be inbounded under multiple ECOMMERCE COMPANY style codes should be mentioned on the boxes
5. Products sold on website as an individual piece should not be sent in sets
6. Bundle offers/products must be sent as bundle
7. Shipment should be delivered with Delivery Note, invoice copy
8. Loose seal/ Tempered seal/ Double sealed items are not acceptable
9. All security tags must be removed before delivery. If not, these will be rejected for inbound and supplier is responsible for return pick up.
10. All items must be packed with plastics bags to prevent damage and dust
11. Books, Perfumes, Jewelry must be shrink wrapped
12. Fragile items must be properly wrapped with Bubble wrap or padded packaging
13. Expiry should be at least 6 Months for all the products
14. All products should have brand and product tags
15. Price tags should not be mentioned
16. Products should not come with hangers

Note:

Shipment will be accepted as per delivery scheduled time.

Goods sent in master carton, sold as individual units on the website are stocked as individual units in inventory and in case of RTV of goods, the goods will be returned in non-branded brown boxes as we don’t store master cartons.

Old RTV if pending at warehouse must be picked up on the delivery of new shipment or 1 week from date of notification (whichever is earlier).

At Legal writing experts, we would be happy to assist in preparing any legal document you need. We are international lawyers and attorneys with significant experience in legal drafting, Commercial-Corporate practice and consulting. In the last few years, we have successfully undertaken similar assignments for clients from different jurisdictions. If given this opportunity, The LegalPen will be able to prepare the legal document within the shortest time possible. You can send us your quick enquiry ( here )