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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 118141
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
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I want to start up a new business selling items on consignment.

Customer Question

I want to start up a new business selling items on consignment. However, I need technical legal advises on what my parameters are as far as selling used items. What kind of licensees and requirements do i need to start off? This business would cover almost everything people want to sell but just on consignment, from toys to warehouse equipment, kitchen appliances to used vehicles. Also, if the owners of the merchandise does not pick up the items that was not sold during the contract period, do i have the right to claim that item and is it legal to put that clause in a contract?
Submitted: 4 years ago.
Category: Business Law
Expert:  Law Educator, Esq. replied 4 years ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

In selling used items in this manner, the first thing you need to make sure of is that the people bringing you the items have the legal right to sell them. To protect yourself on this accord, your consignment agreement would contain a statement that the party affirms that the property they are placing for consignment sale belongs to them or they have legal rights to sell the property. For vehicles where there is a title involved, they must present the title to you. Also, on vehicles while it is an as is sale, you risk more legal actions, so your contract would also have a clause stating that the party bringing you the merchandise for sale agrees to indemnify you from any legal suits from buyers regarding the property you sell for them. You would also post in your store all sales are as is and the owner selling the property would be liable and not the store.

It is legal for you to put a clause in the contract giving the customer 30 days upon you giving them written notice at the address they list on your consignment agreement to pick up their item or they will forfeit the item to you as it will be considered abandoned. I would suggest putting this clause in bold letters so that it is obvious to the party contracting with you to avoid any litigation and to cover yourself.

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