Consignment is a type of contract in which the consignor delivers the goods to the consignee for sale. The consignee takes care of the goods and sells them. Until the goods are sold, the consignor does not lose ownership of the goods. After the sale, the consignee pays the consignor a certain amount of sale proceeds. The consignor is generally responsible for the freight charges for the shipment of the goods.
Under the Uniform Commercial Code, consignment is a transaction in which a person delivers goods to a merchant for sale and the merchant is required to operate under a name other than that of the consignor, and the minimum value of each delivery is $1,000.
In a carriage contract, consignment means the delivery of goods by a carrier to a named receiver. The consignor is the person who sends the goods, also known as the shipper or sender; the consignee is the person who receives the goods, also known as the receiver.
Consignment can also refer to a contract in which someone else is entrusted to store the goods, the person who entrusts is the consignor and the person who accepts the entrustment is the consignee.
See: UCC § 9-102(a)(20)
[Last updated in July of 2022 by the Wex Definitions Team]