If you want to know about the rights and responsibilities of product handled on consignment, this section of DRC’s Trading Standards can be used as your guide. These are the most important elements to take into consideration when members accept produce for sale on consignment:
- Reasonable care, diligence in disposing of the produce, and prompt sales of the product in a fair and reasonable manner are required
- The consignee may not employ other persons or companies to dispose of all or part of the product without authorization from the consignor
- A consignee is not authorized to sell product on consignment without the consignor’s consent
- Averaging or pooling of sales is not permissible unless written consent from the consignor is given
- An itemized account of sale must be submitted by the consignee. An accurate report of sales and expenses must be provided
- Expenses or charges must be supported by proper receipts or invoices
- A consignee is entitled to a commission which the percentage should have been previously discussed
- A consignee is not allowed to sell all or part of the product to a person or firm over which they have either direct or indirect control
Another important issue to consider is that, unless otherwise agreed to by the parties, the consignee is not required to request an inspection to demonstrate the condition of the product upon arrival. The only time the consignee is required to request an inspection is when disposing of more than 5% of a load in order to demonstrate that the product has no commercial value.
