Consignment: what is this form of product sale?

A consignment agreement is a document thatconclude for the implementation of purchase / sale in foreign trade. The legislation of the Civil Code of the Russian Federation does not explicitly provide for it. On the legal essence of this agreement is mixed (paragraph 3 of Article 421 of the Civil Code of the Russian Federation). The parties agree on this document to harmonize the rules, the elements of which are contained in the mixed contract. Basically, the contract of consignment determines the relationship of the supplier (seller) and the distributor (the buyer). For this reason, the provisions of the Civil Code of the Russian Federation on the supply agreement can be applied to it.

This document also contains elementscommission agreement. Usually there are signs of a storage contract in it, if the goods are stored in a warehouse with third parties. In some cases, the consignee acts as a responsible custodian. The consignment agreement may also contain some elements of the service agreement - market monitoring, marketing, delivery, transport expedition and so on.

The term "consignment"

This term has a lot of meanings. This word can be called a document, a special order of delivery and payment for goods, an intermediary agreement, an agency contract and much more. Because of the extensive interpretation of the term "consignment" - that this, in fact, is not easy to determine. Sometimes this becomes the cause of litigation. You can explain this by the customs of business turnover. If a consignment is defined in the subject of the contract, then all interested parties will clearly understand what their obligations are, but if specific conditions for cooperation are not stipulated, it becomes unclear what the concluded agreement is, for example, from a commission or delivery.

Consignment as a form of sale of goods

Consignment should be considered as a formsale of goods, in which the owner of the goods transfers it for further sale to the buyer. At the same time, the supplier remains the owner of the products delivered to the consignee during the entire period of the product's stay at the latter. The consignment consignment agreement for the sale of goods must clearly define this point. That is, this definition, or any other similar, must necessarily be reflected in the text of the agreement itself.

What is the advantage of the consignment agreement?

Agreement for the sale of goods, under which rightsownership of it remain for the supplier, called the consignment. That this is not an ordinary delivery, it is understandable. That is, the buyer does not become the owner of the delivered products at the time of its transfer to him. It turns out that the exporter will always be able to withdraw from the consignor unrealized goods from the warehouse, in the event that the latter turns out to be an insolvent counterparty. This is the advantage of choosing such an agreement.

Peculiarities of payment for goods in transit under a consignment agreement

Payment for delivered products is made byaccounts receivable, that is, in installments. In some cases, a price collusion, a unilateral refusal to fulfill the obligations, punitive agreements and other measures are chosen as a way of securing obligations.

Terms of agreement

The consignment agreement may contain conditionsnot only sales, storage, but also promotion of goods in a certain territory. In this case, the sales representatives directly contact the points of sale on the sale of goods. As sales representatives are employees of either the supplier or the buyer. It is possible to involve intermediaries with whom the contract on provision of paid services is concluded and a document on liability.

Often a consignment that it is in trade practicealready known, includes conditions that provide for the procedure for advertising the goods. You can include here the following: the implementation of drawings, tastings, test drives and other promotional activities with the participation of interested consumers. The agreement also reflects the conditions for the time and place of the advertising campaign, the control of the availability of goods in the outlet, its layout, and so on.

Forms of agreement

There is a simple, partially recurrent andnon-returnable consignment. What are these forms and how do they influence the organization of the sale of the goods? Partially refundable consignment implies the buyer's obligation to purchase from the supplier an agreed quantity of unrealized goods. The irrevocable form does not give the consignee the right to return the unsold goods, he must be redeemed in full.

Nevertheless, to solve the problem of guaranteedSales by the form of consignment will not work. It is clear that if the consignor can not successfully sell the goods, the partners will analyze the current situation to determine the cause of the failure. As a rule, the main factor of low demand is non-competitiveness of products - insufficient technical level of the product, high price level, much more.