Definition
Consignment has two related but distinct legal meanings:
1. The act or process of sending goods from one party to another, typically by means of a common carrier, for the purpose of sale, storage, or other disposition. In this sense, consignment describes the transaction or shipment itself — the transfer of physical possession of goods to an agent or intermediary who will sell them on behalf of the original owner.
2. The goods or property so sent. A consignment is also the collection of items comprising a particular shipment or delivery, treated as a discrete unit for purposes of transit, insurance, customs, and commercial documentation.
Underlying both meanings is the legal structure that defines consignment as a commercial arrangement: the consignor (the owner) delivers goods to a consignee (typically a factor, agent, or retailer) who holds and sells the goods on the consignor's account. Title ordinarily remains with the consignor until sale. The consignee does not purchase the goods outright; the consignor bears the risk of non-sale and the consignee earns a commission or percentage. This distinguishes consignment from an outright sale and from a bailment for purposes other than sale.
Common Language
Modern common usage (Wiktionary): A collection of goods sent, in transit, or having been sent; also the act of sending such goods; also the arrangement by which goods are sold through a third-party vendor, with the original owner retaining ownership until sale.
Historical common usage (Webster's 1913): The act of consigning or sending property to an agent or correspondent in another place, as for care, sale, or similar purposes; also the goods or commodities so sent; also the written instrument by which they are consigned.
The common and legal meanings are closely aligned, but the common usage — particularly the modern Wiktionary definition — captures the informal consignment shop context without precision about where title rests and who bears risk. In legal research, the ownership structure matters enormously: a consignment is not a sale, not a loan, and not a simple bailment, and treating it as any of these in historical documents or commercial disputes will produce errors. The gap between casual and legal use is narrowest in the goods-in-transit sense and widest when the arrangement's legal consequences — creditor claims, insolvency, lien rights — are at issue.
Common Confusion
Consignment is frequently confused with sale on credit and with bailment. In a consignment, the consignor retains title; in a sale (including a credit sale), title passes to the buyer. In a bailment, goods are delivered for a purpose other than sale, and the bailee has no authority to transfer title. The confusion matters most in creditor and insolvency contexts: if a court characterizes a consignment as a sale, the consignee's creditors may reach the goods; if characterized correctly as a consignment, the goods remain the consignor's property. Researchers should also distinguish consignment from a factor arrangement more broadly — a factor may receive goods on consignment, but the term factor encompasses a wider range of agency relationships.
Recognized Forms
/SUBTYPES
True consignment: An arrangement in which the consignee is the consignor's agent for purposes of sale, title never passes to the consignee, and goods are returned or accounted for if unsold. This is the core legal meaning and the form most carefully analyzed in commercial law.
Consignment as security device (disguised consignment): An arrangement styled as a consignment but functioning as a secured transaction, where the consignee is effectively a buyer who has financed the purchase through a retained-title structure. Modern commercial law — particularly Article 9 of the UCC — treats many such arrangements as secured transactions rather than true consignments, requiring filing to protect the consignor against the consignee's creditors.
Why It Matters in Research
Researchers face two major navigational challenges with consignment in the Law Mind corpus.
First, the term operates at the intersection of agency, bailment, sale, and secured transactions law. Historical sources treat consignment primarily through the lens of mercantile agency and factor law. Modern sources, post-UCC, analyze many of the same arrangements through Article 9's secured transaction framework. A case or treatise from the nineteenth or early twentieth century will not use Article 9 language and may characterize arrangements that modern law would treat as secured transactions as simple consignments. Reading backward from modern doctrine into historical sources — or forward from historical doctrine into modern disputes — requires awareness of this structural shift.
Second, the term has a dual reference: sometimes it names the transaction or arrangement, sometimes the goods themselves. In shipping, insurance, and customs documents in the corpus, consignment almost always refers to the goods as a physical unit. In commercial law treatises and agency materials, consignment refers to the legal arrangement. Context determines which meaning is operative, and conflating them in historical research produces misreadings.
Jurisdictional variation in how courts distinguish true consignments from disguised secured transactions affects which historical cases are authoritative and which are superseded by statute. Researchers tracing the development of consignment doctrine should track the adoption of the UCC in each jurisdiction as a structural break in the case law.
Corpus connections: Consignment intersects heavily with entries on factor, bailment, sale, title, and agency. Insurance and shipping records in the corpus use the term in its goods-as-shipment sense and connect to bills of lading, freight, and common carrier materials.
Historical Dictionary Support
The historical dictionaries converge on the core meaning without significant divergence. Bouvier, Black (1st ed.), Rapalje & Lawrence, and Burrill all define consignment as the transmission of goods to a consignee for sale, and all recognize the dual reference to both the act and the goods themselves. Burrill's citation to Kent's Commentaries (3 Kent's Com. 216) grounds the term firmly in mercantile law and the factor relationship.
What the historical dictionaries do not address is the consignment-as-secured-transaction problem, which is a product of twentieth-century commercial law reform. None of the shelf sources grapple with the question of when a consignment arrangement should be recharacterized or what happens to the consignor's title claims against the consignee's creditors under a filing-based priority system. Researchers should treat the historical dictionary definitions as accurate for their period but incomplete for any analysis involving UCC Article 9 or analogous modern statutes.
The Black's 2nd ed. excerpt provided in the source material appears to belong to a different entry (it addresses consideration, not consignment) and has been disregarded as a source error.
Jurisdictional Note
UCC Article 9 defines consignment for purposes of that article and subjects many consignment arrangements to its filing and priority rules, effectively treating them as secured transactions. States that have adopted Article 9 (all U.S. jurisdictions) apply this framework, but courts vary in how they distinguish true consignments — where the consignee is genuinely an agent — from consignments that are functionally purchase-money arrangements. Researchers working in pre-UCC materials or in non-U.S. jurisdictions will encounter consignment doctrine governed entirely by agency and factor law, without the Article 9 overlay.
Encyclopedia Cross-Reference
See Law Mind Encyclopedia: Agency; Bailment; Factor and Factoring; Secured Transactions (UCC Article 9)