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Bill Of Sale
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A Bill of Sale is a legally-binding document that transfers ownership of goods from one party/person to another. A Bill of Sale is also often used as a security for a debt. It records that a buyer has bought and paid for one or more items, who sold the item and who bought it, and how much the buyer paid.

Typically, a Bill of Sale is proof of change of ownership of personal items where the transaction is between two private parties. They generally only used to transfer items between two private parties; and for goods that are moveable and tangible. A Bill of Sale is rarely used to buy or sell private, retail or commercial property; except where a property is put up as collateral for a loan.

Different Bills of Sale cover the sale of:

  • Motor vehicles and vessels: cars, trucks, yachts, motorboats

    A Bill of Sale for a motor vehicle or vessel acts as proof of ownership during the time it takes to register the vehicle/vessel. It’s a record of details such as the VIN, odometer, selling price and name and contact details for the seller and buyer. It needs to be signed, dated and notarised.

  • General items: jewelry, electronics, appliances, furniture, clothing

    A Bill of Sale for general items doesn’t need to be notarised. It’s intended to serve as an intention to purchase an item/s with the final selling price and details of the seller and buyer. It needs to be signed and dated by both parties.

  • Firearms

    A Bill of Sale for a firearm acts as proof of ownership during the time it takes for the buyer to register the firearm in his/her name. It’s a personal record of the make, model, caliber and serial number of the firearm. A Bill of Sale for a firearm is not a legal requirement but it does protect the seller if the buyer loses the gun, it’s stolen or is used illegally in the time between taking ownership and it being formally registered in the new owner’s name.

  • Domestic animals and livestock

    A Bill of Sale for domestic animals and livestock tends to be a record of the sale of high-priced “items”. This includes but is not limited to cows, pigs, horses and wild game such as antelope, buffalo and such. The document also verifies that the animal(s) are in good health at the time of purchase and protects the seller from future claims by the buyer if the animal falls ill or is injured after the transfer takes place.

Is a Bill of Sale a legal document?

Yes, a Bill of Sale is a legal document which provides proof that full consideration has been provided in a transaction and that the seller has transferred the rights to the item which is detailed in the document. However, a Bill of Sale exists as common law and is independent of a state’s legislation.

It may be a simple or complex Bill of Sale, depending on the transaction. For high-value assets, it’s important that a Bill of Sale is completed properly and obtained at the time of sale. It’s typically drafted by the seller but serves to protect both parties if there is any disagreement in the future. A buyer can insist on a Bill of Sale if the seller does not present one.

When is a Bill of Sale used?

Simply put, a Bill of Sale is written confirmation that an item has been sold by a specific seller on a specific date at a specific place for a specific amount of money to a specific buyer. It’s used most often for high-ticket items such as aircraft, vehicles, motorcycles, boats and even animals such as domestic livestock or game.

It’s useful but not completely necessary to use a Bill of Sale for lower value items such as clothing, appliances and possibly jewelry. It’s up to the seller and buyer to decide if a Bill of Sale is required for low-ticket items.

Bear in mind, a Bill of Sale does not prove ownership; only a title transfer proves ownership. It merely records that a voluntary sale transaction has taken place between a legitimate seller and buyer. It’s also commonly used as collateral against a loan, to cover warranties and to protect the buyer against future claims from a third-party.

What should be included in a Bill of Sale?

For a Bill of Sale to be legally binding, it’s important that it complies with the state’s requirements. This may vary from state to state and it’s worth checking online exactly what’s needed.

A generic Bill of Sale should include:

  • purchase date
  • name, address and contact details of the seller and buyer
  • description of the item sold (including odometer readings, valuation etc.)
  • purchase price
  • method of payment
  • details of any warranties
  • a guarantee that the item is free from all claims
  • signature of the seller and buyer
  • signature of a witness for both parties (preferably a notary public)

Both parties should receive a copy of the Bill of Sale once completed and notarised. It’s not necessary to use a notary public to formerly notarise a Bill of Sale for lower-value items but it is important that the document is seen and signed by a reliable witness.


What types of Bills of Sale do you get?

There are different types of Bill of Sale, depending on the transaction:
Absolute Bill of Sale
A document that simply represents the sale or transfer of goods. It does not represent any type of security for a loan or any sales conditions.
Conditional Bill of Sale
A document that covers a financing arrangement where a buyer takes possession of an item but its title and right of repossession remain with the seller until the purchase price is paid in full. A Conditional Bill of Sale allows the seller to take back the item if the buyer defaults on payment.
Quitclaim Bill of Sale
A document used when the seller cannot guarantee that they own the personal property and has the right to transfer it or when the seller does not have the warrant title.
Bill of Sale with Warranty
A document used when the seller can guarantee they own the personal property and has the right to transfer it. It protects the buyer from claims in the future against the personal property.


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