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Clothing Consignment Contract Template for Indonesia

This document establishes a legally binding consignment arrangement between a clothing owner (consignor) and a retailer (consignee) under Indonesian law. It outlines the terms and conditions for the display, sale, and management of consigned clothing items, including commission structures, payment terms, and operational procedures. The agreement complies with Indonesian Civil Code (KUHPerdata) requirements and relevant trade regulations, incorporating provisions for consumer protection and retail operations as mandated by Indonesian law.

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What is a Clothing Consignment Contract?

A Clothing Consignment Contract is essential for businesses engaging in consignment arrangements within Indonesia's fashion retail sector. This document is typically used when a clothing owner wishes to sell their merchandise through a retailer without transferring ownership until the final sale to customers. The agreement must comply with Indonesian legal requirements, particularly the Civil Code (KUHPerdata) and Law No. 7 of 2014 on Trade. It details crucial aspects such as commission rates, payment terms, merchandise handling, risk allocation, and operational procedures. The contract becomes particularly important in protecting both parties' interests while ensuring compliance with local consumer protection laws and retail regulations.

What sections should be included in a Clothing Consignment Contract?

1. Parties: Identification of the consignor (clothing owner) and consignee (store/retailer), including their legal names, business registration numbers, and addresses

2. Background: Context of the agreement, including the nature of the business relationship and general purpose of the consignment arrangement

3. Definitions: Key terms used throughout the agreement, including but not limited to 'Consigned Goods', 'Consignment Period', 'Commission Rate', and 'Settlement Period'

4. Consignment Terms: Core terms of the consignment arrangement, including duration, commission rates, and payment terms

5. Delivery and Acceptance: Procedures for delivery, inspection, and acceptance of consigned goods

6. Pricing and Commission Structure: Details of product pricing methodology and commission calculation

7. Settlement and Payment Terms: Process and timing for sales reporting, settlement, and payment of proceeds

8. Responsibilities of Consignor: Obligations of the clothing owner, including quality assurance and authenticity guarantees

9. Responsibilities of Consignee: Obligations of the store/retailer, including display, storage, and sales efforts

10. Risk and Insurance: Allocation of risk and required insurance coverage for consigned goods

11. Term and Termination: Duration of agreement, renewal terms, and termination conditions

12. Governing Law and Dispute Resolution: Application of Indonesian law and dispute resolution procedures

13. General Provisions: Standard contractual provisions including notices, amendments, and severability

What sections are optional to include in a Clothing Consignment Contract?

1. Marketing and Promotion: Terms regarding marketing responsibilities and cost-sharing for promotional activities - include when parties want to specify marketing arrangements

2. Exclusivity: Terms regarding territorial or brand exclusivity - include when exclusive rights are being granted

3. Online Sales: Provisions for online sales channels - include when e-commerce is part of the arrangement

4. Returns and Exchanges: Procedures for handling customer returns and exchanges - include when consumer returns are permitted

5. Seasonal Arrangements: Special terms for seasonal collections - include for seasonal fashion businesses

6. Staff Training: Requirements for staff product knowledge and training - include for high-end or technical products

7. Visual Merchandising: Specific requirements for product display and presentation - include for branded or luxury items

What schedules should be included in a Clothing Consignment Contract?

1. Schedule A - Product List: Detailed list of consigned products including SKUs, descriptions, and wholesale/retail prices

2. Schedule B - Commission Rates: Detailed breakdown of commission rates by product category or price point

3. Schedule C - Operating Procedures: Detailed procedures for inventory management, sales reporting, and settlements

4. Schedule D - Quality Standards: Specific quality requirements and inspection criteria

5. Schedule E - Store Locations: List of authorized retail locations for consignment

6. Appendix 1 - Reporting Templates: Standard forms for inventory and sales reporting

7. Appendix 2 - Brand Guidelines: Guidelines for brand representation and product display

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Indonesia

Sector

Sales

Cost

Free to use

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