Your consignment agreement should include:

• the store or gallery's responsibility for damages to the goods
• the retail prices for the goods
• the inventory being consigned
• the store or gallery's fees for consigned goods
• who pays for shipping
• promotional responsibilities, if any, and
• a requirement that the store or gallery post a sign regarding consignment (a condition that may protect you in the event of the consignee's bankruptcy).

Also, if possible, include an attorney fee provision (the loser in a lawsuit pays the winner's attorney fees) and an arbitration provision (requiring settlement by a private arbitrator, not a judge). These provisions create incentives for rapid settlement of all (non-bankruptcy-related) disputes.

A written agreement provides practical benefits, but using common sense and your business radar provides the best protection. Ask other artists about their experiences with specific stores and galleries. Avoid large orders until you have built a level of trust with an unknown shop. Ask the store for references from other artists. If you've got a funny feeling about a shop, trust your intuition and just don't do it.