Reading time: 3 minutes

The answer to whether you can set the resale price on a Consignment Agreement at first looks like a “no” – as the Competition and Consumer Act 2010 (Cth) (“CCA”) prohibits resale price maintenance.

In other words, it is generally illegal for suppliers to:

  • Put pressure on businesses to charge their recommended retail price or any other set price, for example by threatening to stop supplying to the reseller; or
  • Stop resellers from advertising, displaying or selling goods from the supplier below a specified price

Resellers also can’t ask their suppliers to use recommended price lists to stop competitors from discounting.

Suppliers can generally recommend a resale price, and specifying maximum prices is usually OK too. They just must not put any pressure on the reseller to charge the recommended price/s, or any other price (e.g. the recommended price less 10%).

Legal Agent

However, when the reseller is acting as your legal agent (which is the case in some types of consignment arrangements), then you can dictate the sale price, as the reseller is not acting as a reseller but rather as your agent, and acts on your behalf with your authority to form a contract directly between you and the end consumer.

You need to have your consignment agreement professionally drafted to ensure they have this effect and are not just the usual “sale or return” type consignment agreements, as resale price maintenance in the latter case will breach the CCA.

You should also be aware that the GST treatment of each type of consignment agreement is very different so you should also look into this thoroughly as part of the process.

Consignment Agreement (Agency) vs Consignment Agreement (Sale or Return)

The best guide to this we have found is the ATO website – because of the differences in the GST treatment, they have tried to clarify precisely the difference between these two different types of relationship, which has come in handy for us when drafting reseller (consignment agency) agreements for our clients.

The ATO suggests that consignment (agency) sale is one where the consignee (agent):

  • does not set the sale price of the goods;
  • receives either a flat rate or percentage commission on completion of the sale;
  • does not hold the goods out in their own right;
  • agrees with the owner of the goods agree that they will act as an agent.

The last feature is often misunderstood by clients. An agent in a legal sense is expressly authorised by their principal (you) to enter into contracts with others (the end buyers in this case) on your behalf. There is never any contract formed between the agent and the end buyer. The only sales contract is formed between you and the end buyer. They are not, in a strict legal sense, acting as a reseller, the correct term is consignment agent.


But don’t get too bogged down in the legalities – that’s what we are here for. We have lots of experience in drafting Consignment Agreements for clients who wish to set the retail price for their products, and if that’s what you want to do, we can help you too.

Get in touch today on 1300 544 755. Our Contract Lawyers are happy to provide a fixed-fee quote!


Construction Contract Essentials

Thursday 12 August | 11:00 - 11:45am

Understand how construction contracts are drafted and how to protect your construction business.
Register Now

Startup 101: Understanding Cap Tables and ESOPs

Thursday 19 August | 11:00 - 11:45am

Cap tables and employee share option plans are essential for fast-growing startups. Learn more with this free webinar.
Register Now

Expanding to NZ: Structuring Your Business For Success

Thursday 26 August | 2:00 - 2:45pm

Launching a business in New Zealand? Understand how to structure your business for success with this free webinar.
Register Now

Preventing Modern Slavery: Your Business’ Legal Obligations

Thursday 9 September | 11:00 - 11:45am

Are you an Australian business with $100m+ annual consolidated revenue? Learn how to determine if you are a modern slavery reporting entity and your obligations under the legislation with this free webinar.
Register Now

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • 2020 Excellence in Technology & Innovation – Finalist – Australasian Law Awards 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice – Winner – Australasian Lawyer 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards 2021 Law Firm of the Year - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer