Contracts in Fashion Industry

By:- Prachi Parekh


Nowadays, people love to spend upon fashion-related products and this has helped the fashion industry to grow tremendously within a short span of time. The growth in the industry has led to employment generation and variety of career opportunities in the same, as well as innovative services and techniques are being welcomed by the industry. This has again led to growth and discovery of various new channels of providing these services and for which different contracts have to be created for each and every channel. Let us find out about various contracts that can be made under this industry.


  1. CONSIGNMENT CONTRACT: This is a contract between a retailer and his agent wherein the retailer grants the right to sell, merchandise, conduct an exhibition for sale of the fashion apparel or inventory. Here, the retailer is called as consignor and his agent as consignee in the whole contract.

Learn more about Contract Drafting with Enhelion’s Online Law firm certified Master Course! 


  1. Preamble: It depicts the details and facts of whole contract in short
  2. Duration clause
  3. Terms of sale of products clause
  4. Percentage that each party would receive clause or Consignment fee clause
  5. Payment options clause
  6. Liability for lost or damaged stock clause or Insurance Clause
  7. Effect on non-sale clause
  8. Minimum Price clause:the price below which the fashion products should not be sold
  9. Location and storage of stock during consignment clause
  10. Expenses clause
  11. Modification/Amendment clause
  12. Applicable law clause

Learn more about Contract Drafting with Enhelion’s Online Law firm certified Master Course! 

  1. SHOWROOM RENT CONTRACT: It is a contract between the shop owner or showroom owner and the designer of fashion products for renting out the shop space to sell his stock. It is a type of a rent contract between these parties wherein the shop owner grants his shop to the designer against periodical payments of rent for the letting.


  1. Preamble
  2. Duration clause
  3. Expenses clause
  4. Terms of the rent payment clause
  5. Applicable law clause
  6. Dispute Resolution clause: In which court to refer the dispute in is included in it.
  7. Terms of letting clause: for example, whether the showroom will be furnished or not
  8. Payment of taxation clause
  9. Breach of contract clause
  10. Liability for damage to the showroom clause
  11. Security deposit clause: the amount of deposit to be given by the designer to the owner for rent
  12. Modification/Variation clause
  13. Termination clause: it also includes notice period to be given to each other


  1. FRANCHISE CONTRACT IN FASHION INDUSTRY: This is acontract wherein one party grants the authority to other to open and operate the business in the name of the selling party. The party granting such a right is called as a franchisor and other party is termed as a franchisee. We find many franchises in fashion industry such as Being Human,Fittin, Choupette, Duke,, Bombay dyeing[2], etc.


  1. Preamble
  2. Franchise fee clause
  3. Security Deposit clause
  4. Royalties clause
  5. Mode of Payment clause
  6. Confidentiality clause: wherein the franchisee agrees not to disclose franchisor’s trade secrets
  7. Standards of Operations clause: wherein fixed set of standards have been set and the franchisee needs to follow them accurately
  8. Inspection clause: Right of franchisor to inspect the premises at regular intervals
  9. Applicable laws clause
  10. Proper registrations by franchisor relating to licenses clause
  11. Advertising and Brand Promotion clause
  12. Training, supervision and support clause
  13. Use of trademark and intellectual property clause: This is one of the most important clauses wherein the franchisor needs to have registered the trademark and should have exclusive rights for use of such a trademark
  14. Duration of contract clause
  15. Renewal clause
  16. Termination of contract clause
  17. Dispute Resolution clause: for example, arbitration, mediation, conciliation
  18. Force Majeure clause: Wherein any of the parties fails to perform their functions due to unforeseen circumstances, then what should be done?
  19. FASHION RELATED ADVERTISING AND PROMOTIONAL CONTRACT: It includes a contract between a designer/retailer/manufacturer of fashion products and an advertising and marketing agency for promoting these products through various channels in exchange of an advertising fee.


  1. Preamble
  2. Duration of contract
  3. Scope of Work clause
  4. Budget and Payment schedule clause
  5. Advertising fee/price clause
  6. Consequences of late payment clause
  7. Breach of contract clause
  8. Termination clause
  9. Dispute Resolution Clause
  10. Copyright clause: This ensures that the ad agency is properly disclosing all the due credits and information relating to their use of any product or services which leads to prevention in copyright violations.
  11. Confidentiality clause
  12. Indemnity clause: If the designer/retailer/manufacturer faces any financial hit, or some similar situation and has not paid the ad agency as per the terms of the contract, then they will need to indemnify the ad agency for their loss
  13. Terms and conditions clause

Learn more about Contract Drafting with Enhelion’s Online Law firm certified Master Course! 

  1. FASHION INDUSTRY EMPLOYMENT CONTRACTS:The employment contracts in fashion industry have a wide range. These can include employment for modelling and acting, designing, stitching, manufacturing, transportation and distribution/shipping of fashion products.


  1. Preamble: Information relating to the facts for entering into the contract, parties and type of employment
  2. Duration clause
  3. Force Majeure clause
  4. Salary/Wages/Remuneration related clause
  5. Number of working days clause
  6. Confidentiality clause
  7. Annual/sick Leave clause
  8. Maternity/Paternity leave clause
  9. Liability for breach of contract clause
  10. Termination clause
  11. Dispute resolution clause
  12. Places to be worked at clause
  13. Other perks or social benefits clause
  14. Overtime clause
  15. Retrenchment Benefits clause
  16. Outsourcing/ sub-contracting clause
  17. Restrictions/prohibitions in employment clause: Sometimes there may be restrictions to the person being employed by and an employer in the fashion industry relating to age, marriage etc and is included in this clause.
  18. Survivability clause
  19. Severability clause

Learn more about Contract Drafting with Enhelion’s Online Law firm certified Master Course! 

  1. OUTSOURCING CONTRACTS IN FASHION INDUSTRY:These contracts include outsourcing certain services or products which are important to the fashion industry. For example, fashion events management services, human resource services, apparel outsourcing, technology outsourcing.


  1. Preamble: including the reason, facts and details of parties entering into the contract
  2. Retained Rights clause: Each party retains certain rights with respect to title, interest etc
  3. Terms and conditions clause: It may include that the services or products must be of good quality and free from any defects
  4. Remuneration clause
  5. Duration clause
  6. Liability for Breach clause
  7. Confidentiality clause
  8. Survivability clause: it ensures that even after the contract has been performed certain terms and conditions in the contract will still remain in force, this is because of the confidentiality and non-disclosure clause, as the trade secrets have to be kept secret even after completion of the performance to the contract.
  9. Termination clause
  10. Guarantee/Warrantee clause
  11. Modification/Amendment clause
  12. Technical assistance clause
  13. Territories of providing services clause
  14. Inspection and acceptance clause
  15. Applicable Law clause
  16. Severability clause:Due to any uncertainty if provision of this contract becomes unlawful or impossible to perform, then this clause ensures that the whole contract is not termed as unenforceable but except the certain provisions remaining of the contract remains in force with full validity.
  17. Independent contractor clause
  18. Dispute resolution clause


Thus, as we saw above these were some of the different types of contracts under the fashion Industry and some of which though contains similar clauses but are also specialised as per their work. Some clauses such as severability, survivability, dispute resolution, applicable governing laws, confidentiality clause, force majeure clause are amongst the most important clauses which safeguards the contract against uncertain or unforeseen events that can make the contract disputable or void. Inserting these clauses ensures that the contract remains in force and is termed to be valid. The non-disclosure clause also ensures that the valuable trade secrets are not revealed by the parties to the contract and the survivability clause exists even after the parties have finished dealing or performing as per the contract and if such a term is breached, the consequences need to be faced by the defaulting party as per the provisions in that effect in the respective contract.