A bill of sale is a document detailing the sale of a property or transferable goods from one party to another. It serves as legal evidence and confirms that full consideration has been given to that transaction. A bill of sale also states that the seller has conveyed the assets rights to the buyer, who now takes full ownership.
Related: Buying a house? Make sure you’re prepared by reading our complete guide on how to buy a home.
How Did A Bill Of Sale Start?
The phrase “bill of sale” was initially a reference to any written documentation where the full disposition of an individual’s property, sold for financial compensation, had occurred. Since a bill of sale is independent of U.S. common law, people took advantage of it through fraud and misinformation. This continued until the progression of contract law; digital record systems made it even more difficult to keep doing so.
Since then, a bill of sale is more likely to be used as a written form detailing the voluntary conveyance of ownership or title of personal property. This is either absolute or done to provide additional security for the parties involved.
What Types Of Bills Of Sale Are There?
There are 2 commonly used Bills of Sale, and they’re represented in these forms:
- The absolute Bill of Sale: not representing a form of security, instead they are documents showing evidence of conveyance, assurances and other allocations of personal chattels. This type of bill solely acts as a contract for the sale of goods, embodied by the sale of goods law and common law of contractual obligations.
- The conditional Bill of Sale: portraying any allocation or conveyance of personal chattels to a party, through either security or cash payment. By forming a security that favors the grantee, a conditional bill of sale gives the grantee the personal right of seizure. This also gives them rights to security of interest in a proprietorial nature.
When Do You Use A Bill Of Sale?
It is advisable to use a Bill of Sale while selling personal property of value, mostly utilized for the conveyance of a car, boat, aircraft or a house. However, they can also be used for smaller items such as computers, TV’s, furniture and stereos. If your aim is to sell real estate, there is a specific Bill of Sale for that called the Land Sale Contract.
How Does A Bill Of Sale Help You?
By stating the details of the transfer in a written document, a bill of sale helps reduce the risk of fraud that plagued private sales for decades. It also provides insurance that the sale was conducted legally and that both parties agreed to the terms. To acknowledge the agreement is legitimate, the Bill of Sale requires that both buyer and seller sign the document once the transfer has been completed.
Is A Bill Of Sale Universally The Same?
Since a Bill of Sale can cover a wide variety of personal items, not all of them are the same and each state has their own laws regarding their usage and requirements. If you intend to sell something of value and need guidance, click the link below.