The delivery of goods to a carrier to be shipped to a designated person for sale. Abailmentof goods for sale.
A consignment is an arrangement resulting from a contract in which one person, the consignor, either ships or entrusts goods to another, the consignee, for sale. If the goods are transported by a carrier to the consignee, the name of the consignor appears on the bill of lading as the person from whom the goods have been received for shipment. The consignee's name appears on it as the person to whom delivery is to be made. The consignee acts as an agent on behalf of the consignor, a principal, in selling the goods and must take reasonable care of them while in his or her possession. The consignor does not give up ownership of the goods until their sale.
Under the terms of the consignment contract, the consignee agrees to pay the consignor a balance of the price received for any goods sold, which has been reduced by a fee, usually a small percentage of the sale price. Any goods that have not been sold must be returned to the consignor.