Advisory Case on Reviewing a Sales Service Consignment Agreement

1. The Client's Situation

The client had outsourced sales and selling operations at numerous stores to an outside specialist firm, and as the existing contract expired, it needed to conclude a new consignment contract. In particular, with respect to sensitive provisions such as the sales-based commission payment structure, inventory checks and loss liability, and the handling of personal information, the possibility of conflicts of interest with the consignee was high, so a legal-risk review was required. Accordingly, the client asked our Legal Team to review the draft contract so as to avoid bearing unnecessary legal liability.

Your Legal Team closely reviewed the entire contract and proposed revisions centered on clarifying the scope of the consigned work, reasonably adjusting the provisions on inventory checks and loss liability, limiting the grounds for deduction or deferral when paying consignment commissions, strengthening the management and supervision system for the consigned handling of personal information, and clarifying the attribution of labor and safety liability. In addition, we restructured the contract to defend the client's position as the consignor by securing balance in the force-majeure clause, the confidentiality clause, and the termination clause.

Through the contract revision, the client was able to reduce its unreasonable risk burden and to minimize the possibility of disputes by clarifying the consignee's liability. In particular, by effectively limiting the consignor's liability in matters such as inventory loss, personal-information leakage, and labor disputes, it secured stable store operations and a legal safety net.