How to Read a Consignment Agreement

This guide is for consignors about to sign an agreement with a consignment shop, gallery or dealer. You will learn what the common sections of a consignment agreement mean, what questions to ask, and which terms deserve the closest attention. It is general information, not legal advice; for high-value items or unusual terms, consider having an attorney review the agreement.

Why the agreement matters

A consignment agreement is a contract that sets out who owns the item, who sets the price, how much you receive and what happens if the item does not sell. Many shops use a standard form, and many consignors sign without reading it. A few minutes of careful reading can prevent misunderstandings later, especially about money and unsold items.

Item list and descriptions

The agreement or an attached intake sheet should list every item you consign, with a description and usually an item number. Check that each item is described accurately, including any condition notes. If an item is valuable, ask that the description include details like the maker or model. Keep a copy of this list.

Ownership

Most agreements state that you remain the owner until the item sells, and that you have the right to sell it. If you are consigning items from an estate or that belong jointly to others, make sure you have authority to sign.

Commission split

This section says how the sale price is divided between you and the shop. Look for:

• The percentage you receive and the percentage the shop keeps.
• Whether the split changes for higher- or lower-priced items.
• Whether any fees, such as card processing, intake, cleaning or delivery fees, are deducted before or after the split.

Splits vary by shop and by item type. What matters is that you understand exactly how your share is calculated.

Pricing and markdowns

Read who sets the price and whether you can approve it. Many agreements include a markdown schedule that lowers the price after a set number of days. Others give the shop discretion to discount or accept offers. If you want a minimum price on an item, ask whether the shop will write it into the agreement.

Consignment period

The agreement should state how long the shop will display your items, often counted from the intake date. Ask whether the period can be extended and whether that changes the price or split.

Payment terms

• When you are paid: on a set schedule, on request, or after a waiting period that allows for returns.
• How you are paid: check, electronic payment, cash or store credit.
• Whether there is a minimum balance to request a payout.
• What happens to unclaimed balances. This can be governed by the agreement and by state law.

Unsold items

This is one of the most important sections. It should say how long you have to pick up unsold items once the period ends, and what happens if you do not. Many agreements allow the shop to donate, dispose of, or take ownership of items left past the deadline. Write that date on your calendar.

Liability for loss or damage

Read who is responsible if your item is stolen, damaged or lost while at the shop. Some shops carry insurance that covers consigned goods; others state that they are not responsible. For valuable pieces, ask directly, and consider whether your own insurance covers items away from home.

Withdrawing items early

Check whether you can take an item back before the period ends, and whether there is a fee. Some shops charge a withdrawal fee to cover the cost of intake and display.

Returns

If the shop allows buyers to return items, find out how that affects your payment. Some shops hold payouts until the return window closes.

Quick checklist

• Confirm every item is listed and described accurately.
• Understand the split and every fee deducted.
• Know who sets prices and how markdowns work.
• Check the consignment period, payout schedule and method.
• Note the pickup deadline for unsold items.
• Ask about liability for loss or damage and early withdrawal fees.