Sale or return agreement: retailer carries stock

This agreement is for the provision of goods on a consignment basis, between a distributor or manufacturer and a retailer. The product may be sold through shops, online or offline, or at events or shows, temporary or permanent. The retailer holds the stock and accounts as required for sales in the previous period.
Suitable for use in: England & Wales and Scotland
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About this document

This is a comprehensive agreement for supply of goods on a sale or return basis, also known as a consignment sale basis.

Under this arrangement, an owner of goods, such as a manufacturer or distributor, provides products to a retailer who pays for them only once they have been sold. The risk of not making a sale is transferred from the retailer to the owner, making it more attractive to the retailer to offer the products for sale.

This agreement can be used where the retailer sells through a shop or at any other venue. For example, the venue could be a trade show, an office vending machine, or a pop-up railway station stall.

Consignment is often used as a basis for a distributor to introduce new products to a market, where the product itself or the brand is relatively unknown. For example, a gift shop might agree to take costume jewellery from a new designer. It can also be used where the method of selling or location is untested. For example, dairy products from local farmers might be sold through vending machines in a community hall.

The essential feature of the agreement is that the retailer takes responsibility for the goods while in his or her care and pays the goods owner only for those he or she has sold.

This agreement is not suitable as a concession agreement where the concession is staffed by the seller and/or a fixed space is managed by the seller.

The agreement can cover a deal for multiple outlets. It could easily be edited for use with multiple individual shop owners or show managers.


The document is comprehensive so as to be able to cover many different variations of deal. Alongside many small legal matters, it covers subjects including:

  • Ordering, delivery and stock management
  • Price management
  • Stock holder obligations - a raft for you to choose from
  • Payment procedure
  • Goods returned by customers
  • Title while the goods are with the retailer
  • Intellectual property protection
  • Indemnity in case things go wrong
  • Alternative termination arrangements
  • Many other strong provisions

This document was written by a solicitor for Net Lawman. It complies with current English law.

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