ComLaw

This Practice Note assists with the review and/or negotiation of a consignment stock agreement, and accompanies Precedents: Consignment stock agreement—pro-customer and Consignment stock agreement—pro-supplier. A consignment stock arrangement is one where a seller of goods (the consignor) consigns a stock of goods to a buyer (the consignee) and in doing so retains ownership of those goods pending the moment when they are taken for use by the buyer. The stock of the seller’s goods is retained by the buyer, usually on its premises, and is at the buyer’s disposal.

This Practice Note assists with the review and/or negotiation of a drop ship agreement and accompanies Precedents: Drop ship agreement—pro-customer (merchant) and Drop ship agreement—pro-supplier. Drop shipping is a term that is often applied loosely to cover a variety of supply chain models and theoretically can arise at various different points in the supply chain eg manufacturer to distributor, distributor to merchant or manufacturer to merchant. However, common to all these models is the concept that it is an arrangement which allows a merchant to operate free from stock holding constraints by leaving the physical stock holding and supply arrangements to be managed by a third-party, usually the manufacturer of the goods.

This Practice Note assists with the review and/or negotiation of a warehousing and transport services agreement. It is intended for use by a lawyer who is representing the customer. It is implicit in much of this Practice Note, reflecting the commercial reality of many of these deals, that the warehousing and transport services agreement at issue has been drafted by the supplier and is biased in its favour. For a precedent with pro-customer bias, see Precedent: Supply of warehousing and transport services agreement—pro-customer.

This Precedent consignment stock agreement—pro-customer is an agreement for the supply of goods on a consignment basis. This consignment stock agreement is drafted in favour of the customer. To improve the efficiency of the customer’s supply chain, the customer holds the consignment stock of goods at its premises before a formal purchase of the consignment goods is made.

This Precedent consignment stock agreement—pro-supplier is an agreement for the supply of goods on a consignment basis. This consignment stock agreement is drafted in favour of the supplier. To improve the efficiency of the customer’s supply chain, the customer holds the consignment stock of goods at its premises before a formal purchase of the consignment goods is made.

This Precedent drop ship agreement is for a transaction involving a supplier (in this case the manufacturer of the goods) and its customer (in this case, a retail merchant) . It assumes that the merchant will separately be trading directly with consumers, or the end-users of the goods. This Precedent has been drafted with a bias in favour of the customer. Drop shipping can arise at different points in the supply chain eg manufacturer to distributor, distributor to merchant or manufacturer to merchant. A drop ship agreement is an agreement for the supply of goods on terms which allow a merchant to operate free from stock holding constraints by leaving the physical stock holding and supply arrangements to be managed by a third party, in this case the supplier or manufacturer of the goods.

This Precedent drop ship agreement is for a transaction involving a supplier (in this case the manufacturer of the goods) and its customer (in this case, a retail merchant). It assumes that the merchant will separately be trading directly with consumers, or the end-users of the goods. This Precedent has been drafted with a bias in favour of the supplier. Drop shipping can arise at different points in the supply chain eg manufacturer to distributor, distributor to merchant or manufacturer to merchant. A drop ship agreement is an agreement for the supply of goods on terms which allow a merchant to operate free from stock holding constraints by leaving the physical stock holding and supply arrangements to be managed by a third party, in this case the supplier or manufacturer of the goods.

This Precedent is an equipment hire agreement, also known as an equipment lease or an equipment rental agreement, under which one party (the supplier) hires defined equipment to the other (the customer). The Precedent has been structured as an operating lease (as opposed to a finance lease) and is drafted in favour of the customer. This Precedent is suitable only for business to business (B2B) hire agreements. Whilst this hire agreement includes an option on the part of the customer to purchase the hired equipment at the end of the hire period, it is not a hire purchase agreement.

This Precedent is an equipment hire agreement, also known as an equipment lease or an equipment rental agreement, under which one party (the supplier) hires defined equipment to another (the customer). The Precedent has been structured as an operating lease (as opposed to a finance lease) and is drafted in favour of the supplier. This Precedent is suitable only for business to business (B2B) hire agreements. While the hire agreement includes an option on the part of the customer to purchase the hired equipment at the end of the hire period, it is not a hire purchase agreement.