Bill of Sale Laws
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. The 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 be also be issued in transactions where the buyer is obtaining a right, interest, or title to the property without the property actually leaving the physical possession of the seller.
What should be contained 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 should include the following information:
- An identification of the property being transferred
- The amount of money paid for the sale
- Names and addresses of both the Seller and the Buyer
- Specific, detailed information about the property being transferred
- Any representations, claims, or warranties regarding the property
- Any guarantees made by the Seller about 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. Since bills of sale are often legally binding, they can be used as evidence in the instance of 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 can present problems if the bill will be entered as evidence in court.
What is an Absolute Bill of Sale?
Depending on the nature of the transaction involved, bills of sale can take different forms. There are two basic types that the bill of sale comes in- “Absolute” bill of sale and “Conditional” bill of sale.
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. In essence, 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” does create an obligation for the parties with regards 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, the creditor may take possession of the property in the future if necessary in order to satisfy the debt.
Do I need a Lawyer for issues with a Bill of Sale?
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 may be necessary to consult with a lawyer if you need to create a bill of sale. Your attorney will be able to draft and review the bill of sale so that your assets and future interests are protected. Also, in the event of a dispute over the bill, an experienced attorney can represent your claim in court.
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Last Modified: 04-08-2011 10:45 AM PDT