Consignment Agreement - Template, Sample Form Pro · PH-law

CONSIGNMENT AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

This Consignment Agreement (the "Agreement") is made and entered into this ________ day of ________, 20________, at the City/Municipality of ________, Province of ________, by and between:

________, a stock corporation duly organized and validly existing under and by virtue of the laws of the Philippines, with principal address at ________, with Securities and Exchange Commission Registration No. ________ and Taxpayer Identification No. ________, represented in this act by ________, who holds the position of ________, duly authorized by virtue of a Board Resolution/Secretary's Certificate dated ________, hereinafter referred to as the CONSIGNOR;

- and -

________, a stock corporation duly organized and validly existing under and by virtue of the laws of the Philippines, with principal address at ________, with Securities and Exchange Commission Registration No. ________ and Taxpayer Identification No. ________, represented in this act by ________, who holds the position of ________, duly authorized by virtue of a Board Resolution/Secretary's Certificate dated ________, hereinafter referred to as the CONSIGNEE.

The CONSIGNOR and the CONSIGNEE shall hereinafter be referred to individually as a "Party" and collectively as the "Parties".

WITNESSETH: That -

WHEREAS, the CONSIGNOR is the owner of certain products which it desires to offer for sale on a consignment basis;

WHEREAS, the CONSIGNEE is engaged in a business through which it is able to, and desires to, sell the said products on behalf of and for the account of the CONSIGNOR;

NOW, THEREFORE, for and in consideration of the foregoing premises and of the mutual covenants, terms, and conditions hereinafter set forth, the Parties hereby agree as follows:

ART. I. THE PRODUCT

The following product or products (the "Product") shall be delivered to and sold on consignment by the CONSIGNEE:

________

ART. II. TITLE AND OWNERSHIP

§ 2.1. Pursuant to Articles 1466 and 1869 of the Civil Code of the Philippines, this Agreement constitutes a contract of agency to sell on commission/consignment, and not a contract of sale. Title to and ownership of the Product shall remain with the CONSIGNOR until the Product is sold to a bona fide buyer, or until the CONSIGNEE fails to return the same within the period agreed upon by the Parties.

§ 2.2. The CONSIGNOR hereby grants the CONSIGNEE the right to sell the Product strictly in accordance with the terms of this Agreement. The CONSIGNEE acquires no right, title, or interest in or to the Product other than the authority to sell the same as herein provided.

ART. III. DELIVERY, ACCEPTANCE, AND SALE OF THE PRODUCT

§ 3.1. The CONSIGNOR undertakes to supply and deliver the Product to the CONSIGNEE for sale on consignment as agreed upon by the Parties.

§ 3.2. The CONSIGNEE undertakes to accept delivery of the Product and to exert its best efforts to effect the sale thereof. The CONSIGNEE shall inspect the Product upon delivery and, if the Product is found to have any damage or deterioration, the CONSIGNEE may choose to accept or reject delivery. If the CONSIGNEE chooses to accept delivery, it shall make a written statement of any damage or deterioration of the Product; otherwise, the same shall be deemed to have been received in good condition.

§ 3.3. The CONSIGNEE hereby acknowledges and agrees that delivery and acceptance of the Product is solely for the purpose of the sale thereof on a consignment basis, that it does not have any right, title, or interest in and to the Product, and that the Product is not intended as security of any kind.

ART. IV. PROMOTIONAL AND ADVERTISING MATERIALS

The CONSIGNOR shall provide marketing, promotional, and advertising materials to the CONSIGNEE to display or use to encourage sales of the Product. The CONSIGNEE reserves the right to approve any materials that will be displayed, which approval shall not be unreasonably withheld.

ART. V. SELLING PRICE

§ 5.1. The CONSIGNEE undertakes to sell the Product at reasonable prices, even with mark-up, provided that the CONSIGNEE shall not sell the Product below the following prices (the "Selling Price"):

________

§ 5.2. The CONSIGNOR undertakes to maintain the Selling Price of the Product during the duration of this Agreement.

ART. VI. SALE ON CREDIT

The CONSIGNEE shall not sell the Product on credit or on installment. Any sale made on credit or on installment shall be fully paid by the CONSIGNEE as if the same were fully paid in cash at the time of sale.

ART. VII. REMITTANCE, FEES, AND TAXES

§ 7.1. Upon the sale of the Product, the CONSIGNEE shall remit the Selling Price to the CONSIGNOR within ________ (________) days from the date of sale.

§ 7.2. The CONSIGNEE shall retain the difference between the Selling Price and the actual price paid by the buyer as the CONSIGNEE's commission/fee under this Agreement.

§ 7.3. Each Party shall be responsible for its own taxes due on its respective income arising from this Agreement, including but not limited to value-added tax, withholding taxes, and income tax, in accordance with the National Internal Revenue Code, as amended. The CONSIGNEE shall issue the appropriate official receipts or sales invoices for all sales of the Product as required by law.

ART. VIII. INVENTORY AND RECORDS

The CONSIGNEE shall conduct an inventory of the Product on the first working day of each month. The CONSIGNOR may observe the inventory taking at its discretion. The CONSIGNEE shall also maintain accurate records of sale, which the CONSIGNOR may inspect upon reasonable notice.

ART. IX. LOSS AND DAMAGE

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§ 9.2. The CONSIGNOR holds the CONSIGNEE free from any liability for loss, damage, deterioration, or destruction of the Product arising from fortuitous events beyond the control of the CONSIGNEE which could not be reasonably foreseen or which, though foreseen, was inevitable.

ART. X. FORTUITOUS EVENTS

Neither Party shall be liable for any breach of this Agreement if the same is due to a fortuitous event under Article 1174 of the Civil Code of the Philippines which could not be reasonably foreseen or which, though foreseen, was inevitable.

ART. XI. INDEMNITY

Each Party hereby agrees to indemnify and hold harmless the other Party, its employees and representatives against any and all damages, liability, and loss, as well as legal fees and costs incurred that may arise out of or relate to this Agreement, except where, upon final judgment, a competent court finds that the bad faith, gross negligence, or willful misconduct of one Party caused the damages, liability, and loss, in which case no indemnification shall be due to the Party at fault.

ART. XII. DURATION AND TERMINATION

§ 12.1. This Agreement shall be valid and effective from ________ to ________, but may be terminated earlier upon mutual written agreement of the Parties.

§ 12.2. This Agreement may be renewed upon mutual written agreement of the Parties.

§ 12.3. Notwithstanding the foregoing, this Agreement may validly be terminated upon ________ (________) days prior written notice:

1. By a Party for material breach of the terms and conditions of this Agreement by the other Party;

2. By a Party for the closure, dissolution, insolvency, or bankruptcy, whether voluntary or involuntary, of the other Party;

3. By the CONSIGNOR, if there is no or minimal effort to sell the Product on the part of the CONSIGNEE;

4. By the CONSIGNEE, if the Product is not selling despite its best efforts;

5. By a Party for other similar causes.

ART. XIII. RETURN OF THE PRODUCT

§ 13.1. Upon the termination of this Agreement for whatever reason, the CONSIGNEE shall return the unsold Product and any unused promotional materials to the CONSIGNOR within the following period (the "return period"): ________ from the date of termination.

§ 13.2. The CONSIGNOR shall arrange for and bear all costs and expenses for the return of the Product. The CONSIGNOR shall give the CONSIGNEE a two (2) working day notice of the date when the Product will be collected. If the CONSIGNOR fails to arrange for the return of the Product within the return period through no fault of the CONSIGNEE, the CONSIGNEE may charge reasonable storage fees from the day after the last day of the return period until the Product has been returned to the CONSIGNOR.

§ 13.3. If the CONSIGNEE fails to return the Product on the date arranged by the CONSIGNOR for no valid reason or otherwise delays the return of the Product through no fault of the CONSIGNOR, ownership of the Product shall automatically transfer to the CONSIGNEE on the day after the last day of the return period, and the CONSIGNEE shall be liable to pay the Selling Price to the CONSIGNOR.

ART. XIV. CONFIDENTIALITY AND DATA PRIVACY

Each Party acknowledges and agrees that it possesses certain non-public Confidential Information, and may also possess Trade Secret Information (collectively, the "Proprietary Information"), regarding its business operations and development. The Parties agree that the Proprietary Information is secret and valuable to each of their respective businesses. Each Party desires to maintain the secret and private nature of any Proprietary Information disclosed. "Receiving Party" refers to the Party receiving the Proprietary Information, and "Disclosing Party" refers to the Party disclosing the Proprietary Information.

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1. is known or available to the public at the time of disclosure, or became known or available after disclosure through no fault of the Receiving Party;

2. is already known, through legal means, to the Receiving Party;

3. is given by the Disclosing Party to third parties, other than the Receiving Party, without any restrictions;

4. is given to the Receiving Party by any third party who legally had the Confidential Information and the right to disclose it; or

5. is developed independently by the Receiving Party, and the Receiving Party can show such independent development.

§ 14.2. "Trade Secret Information" shall be defined as any formula, process, method, pattern, design, or other information that is not known or reasonably ascertainable by the public, consumers, or competitors and through which, and because of such secrecy, an economic or commercial advantage can be achieved.

§ 14.3. Both Parties hereby agree that they shall:

1. Not disclose the Proprietary Information through any unauthorized means to any third party throughout the duration of this Agreement and the Parties' relationship with each other;

2. Not disclose the Confidential Information through any unauthorized means to any third party for a period of three (3) years following the termination of this Agreement;

3. Not disclose the Trade Secret Information at any time, for as long as such information remains a trade secret under applicable law;

4. Not use the Confidential Information or the Trade Secret Information for any purpose except those contemplated herein or expressly authorized by the Disclosing Party.

§ 14.4. To the extent that the performance of this Agreement involves the processing of personal data, each Party shall comply with the Data Privacy Act of 2012 (Republic Act No. 10173), its Implementing Rules and Regulations, and the issuances of the National Privacy Commission, and shall implement reasonable and appropriate organizational, physical, and technical security measures to protect such personal data.

ART. XV. RELATIONSHIP OF THE PARTIES

The Parties acknowledge and agree that nothing in this Agreement shall be deemed to constitute a partnership, joint venture, or employment relationship between them, and that this Agreement is for the sole and express purpose of the consignment and sale of the Product. The CONSIGNEE acts as an agent of the CONSIGNOR solely for the purpose contemplated herein.

ART. XVI. SUPPORTING DOCUMENTS AND ADDITIONAL ACTS

The Parties agree to execute such other documents as are reasonable and necessary for the proper implementation of this Agreement.

ART. XVII. APPLICABLE LAW

This Agreement shall be governed by and construed in accordance with the laws of the Republic of the Philippines.

ART. XVIII. NOTICES

All notices, demands, or other communications required or permitted under this Agreement shall be in writing and shall be deemed duly given when delivered personally, sent by registered mail with postage prepaid, or transmitted by electronic mail to the respective addresses of the Parties set forth in this Agreement, or to such other address as a Party may designate in writing. Any change of address shall be communicated to the other Party in writing.

ART. XIX. WAIVER

The failure of either Party to enforce any provision of this Agreement or to exercise any right or remedy provided herein shall not be construed as a waiver of such provision, right, or remedy, nor shall it preclude the subsequent enforcement thereof. No waiver shall be effective unless made in writing and signed by the Party against whom the waiver is sought to be enforced.

ART. XX. SEVERABILITY

If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and such provisions shall remain in full force and effect. The Parties shall endeavor to replace any invalid, illegal, or unenforceable provision with a valid provision that most closely reflects the original intent of the Parties.

ART. XXI. DISPUTE RESOLUTION

Any dispute, controversy, or claim arising out of or relating to this Agreement, or the breach, termination, or invalidity thereof, shall first be settled amicably between the Parties through good faith negotiations. In the event the Parties fail to reach an amicable settlement, the dispute shall be submitted to the exclusive jurisdiction of the proper courts of ________, to the exclusion of all other courts or venues.

ART. XXII. HEADINGS

Headings are for convenience only and do not affect the interpretation of this Agreement.

ART. XXIII. ASSIGNMENT

This Agreement, or the rights hereunder, may not be assigned, sold, leased, or otherwise transferred in whole or in part by either Party without the prior written consent of the other Party.

ART. XXIV. SUCCESSORS AND ASSIGNS

This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of both Parties.

ART. XXV. ENTIRETY OF AGREEMENT

This Agreement represents the entire agreement between the CONSIGNOR and the CONSIGNEE and supersedes all prior negotiations, representations, and agreements, whether oral or written.

ART. XXVI. AMENDMENTS AND MODIFICATIONS

This Agreement may be amended only by a written instrument signed and agreed upon by both Parties.

IN WITNESS WHEREOF, the Parties have hereunto affixed their signatures on the date and at the place first above stated.

________
Consignor

By:

________
________

________
Consignee

By:

________
________

SIGNED IN THE PRESENCE OF:

________        ________

ACKNOWLEDGEMENT

REPUBLIC OF THE PHILIPPINES )
PROVINCE OF ________ )
CITY OR MUNICIPALITY OF ________ ) S.S.

BEFORE ME, a Notary Public for and in the City or Municipality of ________, this ________ day of ________, 20________, personally appeared the following persons:

1. ________, with the following competent evidence of identity: Driver's License with number ________, which expires on ________;

2. ________, with the following competent evidence of identity: Driver's License with number ________, which expires on ________;

all known to me and to me known to be the same persons who executed the foregoing Consignment Agreement, who represented to me that they are duly authorized to sign the same in their respective representative capacities, and who acknowledged to me that the same is their free and voluntary act and deed, as well as that of the corporations they respectively represent. This instrument, consisting of ________ pages, including this page on which this Acknowledgement is written, has been signed by the parties and their instrumental witnesses on each and every page hereof.

WITNESS MY HAND AND SEAL on the day and at the place first above written.

________
Notary Public

Doc. No. ________;
Page No. ________;
Book No. ________;
Series of ________.