What is a consignment

The word consignment derives from Latin consignmentwhich indicates the action of consigning, allocating or designating an amount of money to pay expenses or debts. It also refers to the commercial contracts whose payments for merchandise are made after their sale has been made.

On the other hand, consignment can refer to placing an amount of money in the hands of a third person; set budgets for certain items to pay for services; record an opinion according to court regulations.

The word consignment can be replaced by the synonyms deposit, assets, delivery or remittance.

See also the meaning of Consign.

Consignment contract

The consignment or commercial consignment contract is a agreement in which two figures participate, the consignor (owner of a good or merchandise) and consignee (person who is responsible for the sale of a good or merchandise), in which the power of sale is delegated without losing the right of ownership of the merchandise.

This is a commercial activity that in the field of accounting is also known as consignment in accounting.

The consignee assumes or contracts the obligation to sell the merchandise received from the consignor, after reaching an agreement, in which its value and the percentage that both parties must receive for its sale must be stipulated.

Said agreement also usually establishes that merchandise not sold by the consignee must be returned to the consignor according to the established deadlines.

The consignment contract offers an advantage for both parties. For example, the consignor does not see the need to make a large capital investment in the purchase and storage of merchandise and, for his part, the consignee benefits because he can streamline and prevent his capital and merchandise sale from stagnating.

Payment consignment

Consignment of payment is a legal mechanism that occurs when the consignor rejects or, for some reason, is not willing to receive from the consignee the offer of payment or deposit of an amount required for the merchandise or objects under his responsibility and the which ones want to free themselves.

If the consignee, after several attempts, is unable to pay the consignor directly, then the payment must be made in court, which is known as judicial consignmentthis in order to avoid greater interest and expenses for the care of said assets.

Criminal consignment

When a crime occurs, police forces must carry out an investigation of the events that occurred with the aim of collecting information and evidence about the suspect’s guilt.

Once the evidence is analyzed and proves the alleged guilt and responsibility of the suspect, the case is transferred to a criminal judge. This action is called criminal consignment, the purpose of which is to subject the alleged guilty party to a trial process that determines his guilt and punishment or, otherwise, his innocence.