When selling goods or making a purchase, accurate descriptions of the item condition are important, as are explanations about what type of promises the seller is or is not willing to honor (these are called warranties). Empty promises on the bill of sale or misunderstandings about these aspects of the sale can lead to disputes between buyers and sellers.

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Defining the Limited Warranty

A limited warranty explains what kinds of damage and item parts are covered for a limited time. If you’re selling an item, it is critical to carefully think through the specifics of a limited warranty. For example, the warranty might specify that for six months the seller will replace all parts or only some parts of the item. Labor costs may be included or they may be the responsibility of the buyer. It is important to spell out exactly what will and will not be covered in a limited warranty. 

A Warranty as a Sales Tool

As a seller, you would offer a limited warranty to make the deal more attractive to buyers. For example, a person may want to buy a new puppy, but might need assurance about its health and breeding. If you offer a limited warranty that allows taking the animal to a vet for a check-up, you might ease all fears. The bill of sale might state that the buyer has five days from the date of purchase to clear the animal with a vet. Under such a warranty, as the seller, you might issue a full refund if the vet finds a health problem and writes a note to that effect.   

Evaluating a Warranty

For buyers, evaluating a warranty involves looking closely at a few factors:

  • What is the length of the warranty period, and does it allow enough time to use and test out the product?
  • How practical is it to return the item for repairs or a refund? Are there delivery charges or mailing fees? 
  • Does the person or company issuing the warranty seem reliable? If it is a two-year warranty, for example, will they still be in business or in town during that time?
  • If the item is required on a daily basis, does the warranty allow for a replacement until repairs have been made?
  • Does the warranty include both parts and labor? What exactly does the warranty include? Does it allow the seller to repair or replace broken parts or pay for repairs? As a buyer, do you have a right to call off the sale if promises are not honored?

Deciding whether to sell items on an as-is basis or with a limited warranty depends on the type of item being sold and whether or not offering a warranty makes financial sense for the seller. Once the decision has been made, it's important to clearly outline the terms on the bill of sale.  
Additional bill of sale resources: 

Get started Start Your Bill of Sale Answer a few questions. We'll take care of the rest.

Get started Start Your Bill of Sale Answer a few questions. We'll take care of the rest.