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Meaning of Consignment part 2
Last Updated On: 27-Oct-2021Posted On: 27-Oct-2021
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Meaning of Consignment
When the owner of goods or principle sends goods to his agent on this basis that goods will be sold by the agent and he will be entitled get commission as remuneration at a certain rate on sale of goods. This procedure is known as Consignment. Ownership of goods remains with the consignor. Therefore, he enjoys the whole amount of profit and bears all risks, expenses and losses regarding consignment.
Characteristics of Consignment
- The consignor sends the goods to the consignee for the purpose of sale.
- Consignment of goods is not a sale.
- The relationship between the consignor and consignee is that of principal and agent.
- The consignee acts according to the consignor’s instructions.
- The consignor is the real owner of the goods. He is entitled for profit and also responsible for losses and expenses.
- The consignee sell the goods as an agent of the consignor.
- The consignee is entitled for commission on sale of goods.
- The consignee is the bailee of goods. It is his duty to exercise reasonable care in protecting goods.
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