Bill of Sale Laws
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What Is a Bill of Sale?
A “Bill of Sale” is a written document that confirms the transfer of ownership of property. It is usually given from the seller to the buyer, and typically covers the transfer of personal property rather than real estate or services. A bill of sale basically acts as a legal document, much like a contract, that records the agreement for the sale and receipt of the goods.
A bill of sale may be issued for transfers of property where the buyer obtains actual physical possession of the property. It may also be issued in transactions where the buyer is obtaining a right, interest, or title to the property, but the property does not actually leave the physical possession of the seller.
What Should Be in a Bill of Sale?
A properly written bill of sale should clearly identify the property that is the subject of the transaction. It should also clearly list the circumstances surrounding the transaction, such as the location and time of the transfer.
Ideally, a bill of sale will include:
- Identity of the property being sold
- Amount of money paid for the sale
- Names and addresses of both the Seller and the Buyer
- Specific, detailed information about the property
- Any representations, claims, or warranties regarding the property
- Signature of both the Seller and the Buyer
- The date, time and location of the transaction
It is important that the bill of sale include as much information as possible. Bills of sale are often legally binding, and as such, they may be admissible as evidence in a dispute.
However, if the bill of sale is unclear in any regards, its legal effectiveness may be diminished. For example, if the property cannot be clearly identified from the document, it's reliability may be severely undermined.
What Is an Absolute Bill of Sale?
Depending on the nature of the transaction involved, bills of sale can take different two different forms: “Absolute” and “Conditional.”
An “absolute bill of sale” is simply a document that provides evidence of the transaction for a sale of property. It does not place any further conditions on any of the parties and does not represent a form of security which the seller or buyer can rely upon in the future. Quite simply, an absolute bill of sale simply memorializes a transaction that has already occurred.
What Is a Conditional Bill of Sale?
A “conditional bill of sale” creates an obligation for the parties with regard to the sale or transfer of the property. A conditional bill of sale may be used as a form of security by one of the parties, usually the recipient of the bill. The recipient of the bill may then use the conditional bill in order to secure payment of money from the other party.
An example of a conditional bill of sale is where a creditor has provided a debtor with a loan. In order to secure the loan, the debtor may transfer title to their own personal property to the creditor. Here, the debtor will issue the creditor with a conditional bill of sale stating that they have transferred title to the property to the lender as a form of security. While the physical possession of the property may remain with the debtor, if necessary, the creditor may take possession of the property in the future in order to satisfy the debt.
Do I Need a Lawyer?
A bill of sale is a legally binding document that can provide evidence of the sale of personal property. In some instances it can also create an obligation for one of the parties to transfer property or money to the other party in the future. Thus, it would be wise to consult with a business lawyer if you need to create a bill of sale. An attorney will be able to draft and review the bill of sale so that your assets and future interests are protected.
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Last Modified: 09-04-2014 03:53 PM PDT
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