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:
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.
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.
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:
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.DOWNLOAD BILL OF SALE HERE
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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