What is a Bill of Sale?
A Bill of Sale is a type of receipt used to transfer the ownership of an item. Bills of Sale are often created for the sale or purchase of a used car, but you can use them for the sale or purchase of any type of valuable personal property.
When to use a Bill of Sale?
- You own personal property (other than real estate or a vehicle) that you'd like to sell or transfer, and you need a bill of sale for your accounting records.
- You plan to buy property, other than real estate or a vehicle, from another party and you want to have a record of the transaction in writing.
Bill of Sale
FOR AND IN CONSIDERATION OF the sum of U.S. Dollars, plus any applicable sales tax, inclusive with all sales tax, paid by , the receipt of which is hereby acknowledged, (the "Seller") of , , and (the "Seller") of , , DOES HEREBY SELL, ASSIGN, AND TRANSFER to , (the "Buyer") of , , , and (the "Buyer") of , , , the property described in the attached Exhibit (the "Property"): the following described property (the "Property"):
The Buyer has been given the opportunity to inspect the Property, or alternatively, have the Property inspected. Additionally, the Buyer has accepted the Property in its existing condition.
In the event any dispute between the parties hereto should result in litigation or arbitration, the prevailing party shall be reimbursed for all reasonable costs in connection therewith, including, but not limited to, reasonable attorney's fees and defense costs. In no event shall either party be liable for incidental, consequential, indirect or special damages of any kind, including but not limited to loss of profit.
The terms of this Bill of Sale shall bind and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.
The parties hereby agree to execute such other documents and perform such other acts as may be necessary or desirable to carry out the purposes of this Bill of Sale.
This Bill of Sale shall be signed by the Buyer's Representative and by the Seller's Representative, and shall be effective as of .
IN WITNESS WHEREOF, the parties have executed this Bill of Sale on .
, on behalf of
, on behalf of
Bill of Sale Checklist
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This document can't be used to transfer real estate.
If the item being sold has been guaranteed as security for a loan, it shouldn't be transferred until a release has been received from the lender.
About Bills of Sale
Learn how to document the sale of a car
How To Write a Bill of Sale
A Bill of Sale (also known as a Bill of Sale template or Bill of Sale form) is a legal document that transfers ownership of personal property from a seller to a buyer. Some Bill of Sale documents are only used to transfer personal property, like furniture and equipment. Others can be used to transfer larger and typically more expensive types of personal property, like cars, boats, or motorcycles. For these types of items, using a Vehicle or Car Bill of Sale, Boat Bill of Sale, or a Motorcycle Bill of Sale form is best because these documents will typically require more information to transfer the property.
If the property has been guaranteed as security for a loan, it may be necessary to obtain a release from the party to whom the loan is owed. In such cases, it is advisable to consult with a lawyer.
Here are some of the most common clauses in a Bill of Sale.
The price section of a Bill of Sale describes the full amount of money paid for the property transfer, as agreed upon by the seller and buyer. The transfer price will depend upon the type of property being sold or transferred and any special or custom terms agreed upon by the parties.
The price may or may not include applicable sales tax. There may be an option to specify whether or not sales tax will be included in the total price. The amount of sales tax is different in each state and can vary depending on the goods being sold. Sellers may want to check local laws to determine the amount of sales tax that will apply to their transaction and whether or not to include that price in the total price.
Information about the seller in a Bill of Sale may include both the seller’s name and address. If the seller is an individual, the seller may be described as an individual and their home address included in the Bill of Sale form, unless the parties agree otherwise.
If the seller is a company, the Bill of Sale may state the company’s legal entity, such as a partnership, limited liability company, or corporation, along with the address for the company’s principal place of business, unless the parties agree otherwise.
Buyer / Purchaser
When describing the buyer or purchaser, a Bill of Sale may include both their name and address. If the buyer or purchaser is an individual, they may be designated as an individual and their home address included in the document, unless the parties agree otherwise.
If the buyer or purchaser is a company, the Bill of Sale may include the company’s legal entity, such as a partnership, limited liability company, or corporation, along with the address for the company’s principal place of business, unless the parties agree otherwise.
Description of Items or Property Being Sold
When describing the items or property being sold in a Bill of Sale template, the property may be described with specificity. For example, if the property being sold is a valuable collection of vinyl records, the seller may want to itemize the following in the Bill of Sale:
- Number of records in the collection.
- Title of each record in the collection.
- Artist information for each record.
- Recording date or release date of each record.
- General condition of each record.
Property Being Sold As Is
If the seller is selling the property “as is,” then the Bill of Sale may specify this. For example, the seller may mention in an “as is” provision that the property is being sold in its current condition, and the buyer accepts the property as is (or with any existing flaws). In other words, the seller does not make any promises about the property in the Bill of Sale. Instead, the buyer understands that “what they get is what they see.”
When selling or transferring property as is, the Bill of Sale may not include any warranties as to the property (such as the seller warranting the condition of the property), and the seller may not guarantee the quality or condition of the property to the buyer.
A warranty section in the Bill of Sale is a promise by the seller, offering additional protections to the buyer. For example, a Bill of Sale’s warranty clause details what property is being sold and gives a guarantee (or warranty) to the buyer about the condition of the property or about the seller’s ownership rights (such as the Bill of Sale warrants that the the seller has full and clear title to the property and can legally sell or transfer the property without any legal obstacles).
However, sellers can also include limited warranties. By including limited warranties, sellers may guarantee that they are the owner of the property and have the right to transfer ownership of the property. A seller can also guarantee that the property is free and clear of any liens and is in "good working condition."
An inspection provision in a Bill of Sale gives the buyer the opportunity to inspect the property, or alternatively, have the property inspected by a third party. Additionally, the buyer agrees to accept the property in its existing condition after receiving a satisfactory inspection.
Disputes and Attorney Fees
Generally, when a legal dispute arises between the seller and the buyer, both parties pay their own attorney’s fees if the dispute carries forward to litigation (a lawsuit), mediation, or arbitration.
However, both parties may want to check the applicable law to determine if any additional specifics must be added to the dispute/attorney’s fees section of the Bill of Sale. For example, the applicable state law may specify that the non-prevailing party shall pay the reasonable attorney’s fees of the prevailing party.
Often, courts interpret a Bill of Sale as more of a receipt for the property sale than a binding contract. To ensure that the Bill of Sale can be enforced in a court of law, the seller may need to include enough specific language in the Bill of Sale to ensure its legal enforceability.
For example, sellers may want to specifically document the description of the property and the sales price (including or excluding sales tax), and also include any specific state law provisions applicable to the property sale. This may help sellers enforce the terms of the Bill of Sale if necessary.
For example, sellers may want to include the following language for enforceability: “The terms of this Bill of Sale shall bind and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.”
Property Transfer Date
In the property transfer date section of the Bill of Sale template, the parties may specifically describe when the property will be transferred from the seller to the buyer. The parties may include any events that must happen first before the property is transferred, such as the buyer must satisfy all payment terms satisfactorily and/or the parties must sign and date the Bill of Sale before the property is transferred.
Seller and Buyer Signatures
The Bill of Sale should be signed by both parties. After the Bill of Sale is signed by both parties, legal ownership of the property is transferred, as of the date provided in the document, regardless of which party has possession of the property. The original copy of the Bill of Sale should be given to the buyer. The seller should retain a copy.
Definitions of Bill of Sale Terms
An “as is” provision in a sales contract (like a Bill of Sale) stating that the buyer agrees to buy the property in its current condition (with all existing flaws). In an “as is” sale or transfer, the seller does not give any warranties as to the property.
Assign / Transfer
Assignment is a legal term where one party (or an assignor) transfers property (or any benefits or rights associated with the property) to another party (the assignee).
Consequential damages (often referred to special damages) are the damages that are not directly caused by a contractual breach but arise naturally from the non-breaching party’s actions or non-actions.
Consideration is the primary element of a contract. Consideration is a benefit that is bargained for between the seller and buyer of the Bill of Sale.
Typically, consideration is payment or money in exchange for the performance or the promise of performance by the other party.
Not doing something (or refraining from doing something) can also serve as consideration (such as Party A will pay Party B $500 to not build an adjoining fence taller than six feet).
An encumbrance is anything that legally restricts the transfer or usage of the property. For example, real property is encumbered by a mortgage. Once the mortgage is paid in full, then the bank or financial institutions releases the encumbrance.
An express warranty is a promise or agreement by the seller to provide any property repairs or property replacement if the product is damaged or faulty. Typically, the express warranty will apply to a specified period of time, such as within 90 days after the sale.
Incidental damages are expenses or costs that are reasonably incurred by the non-breaching party while preventing any additional damages from occurring (such as finding a replacement part for the property).
Indemnity or indemnification provisions are contractual provisions where one party agrees to pay for any potential damages or losses caused by another party.
Indemnification provisions are often called hold harmless provisions, meaning that costs are shifted from one party to another.
Indirect damages are secondary or subsequent damages resulting from the initial (or primary) breach of contract or Bill of Sale. For example, indirect damages can include business interruption losses, loss of production, cost of capital, or loss of revenue.
Indirect damages is another term for consequential damages.
An implied warranty is a promise or guarantee that is not explicitly written in the Bill of Sale. Instead, an implied warranty is automatically presumed in that the property will work as expected, offering additional protections to the buyer.
A lien in a Bill of Sale is a provision giving a security interest (or legal claim to the property) to one of the parties to the Bill of Sale. For example, a lien gives the seller the legal right to retain possession of the property until the buyer satisfies all terms of the Bill of Sale.
Special damages is another term for consequential or indirect damages.
Bill of Sale FAQs
When should I use a Bill of Sale and when should I use something else?
Use a Bill of Sale for:
- Vehicles. In motor vehicle sales, the automobile bill of sale represents the transfer of the RIGHT to ownership while the vehicle's certificate of title represents ACTUAL ownership and is required in every state. In exchange for the signed auto bill of sale and a small title transfer fee, the purchaser can apply for a title in his/her name at the state's DMV (Department of Motor Vehicles). In Louisiana, Maryland, Nebraska, West Virginia, or Wyoming, the DMV will require a notarized vehicle bill of sale signed by both the buyer and the seller. Depending on your state, you may also be required to have a smog certification.
- Livestock. Many states require a signed bill of sale as proof of purchase in various instances, such as when transferring a title with your state's DMV or when buying and selling branded livestock, including horses.
Don't use a Bill of Sale for:
- Real Estate. If you're planning on transferring real estate between owners, you can't use a bill of sale agreement. Real estate transactions are simply much more complicated and require different forms, such as a quit claim deed, or forms available only from your state or local government.
- Services. A bill of sale should be used when transferring ownership, not when performing services. If services are involved (such as woodworking, babysitting, business consulting, etc.), it's a better idea to use a general contract for services. If you are a business receiving payment for goods sold, you can use a general receipt.
- For Small Sales. This is a matter of personal preference for the buyer or seller, but most people do not feel it necessary to use a bill of sale for lower-cost items. If you're selling a guitar, a bill of sale makes a lot of sense. If you're selling a couple old fishing lures or making other small-scale sales, it might be more trouble than it's worth.
Are there more specific types of Bills of Sale?
A bill of sale can be used to sell numerous types of personal property. In addition to being suitable for any motor vehicle (such as a car, motorcycle, ATV, or trailer), our printable bill of sale form covers many other items that are commonly bought and sold including:
- Watercraft and aircraft
- Animals and pets
- Firearms and other hunting gear
- Furniture and exercise equipment
- Business equipment
Write a bill of sale for a motor vehicle or any other type of personal property today, or read on to learn more about the following bill of sale agreement documents:
If you have any questions about which bill of sale is right for you as a seller or a purchaser, we can connect you with an attorney for quick answers or a contract review.
Who signs a Bill of Sale?
The buyer and seller sign the Bill of Sale. Depending on the transaction (or on state law requirements), the signatures may need to be notarized.
Does a Bill of Sale need notarization?
Depending on the transaction (or on state law requirements), the signatures may need to be notarized. However, having signatures notarized can help the Bill of Sale be enforced in court.
Can I use a Bill of Sale for services?
No, a Bill of Sale is only used for the transfer of ownership of property, not for exchanged services.
Will I need a Bill of Sale if I’m giving property away as a gift?
To document the transfer of property, you can either draft a Bill of Sale or a Letter of Gift to document the transaction and that it meets any taxable requirements associated with property gifts.
How do I handle disagreements or disputes with the buyer after the sale?
The Bill of Sale should address how the parties handle disputes during the contracting process, including after the sale. For example, the Bill of Sale may require the parties to mediate any disputes before filing a lawsuit in court.
At what point do I give the Bill of Sale to the Buyer?
After the Bill of Sale is signed by both parties, legal ownership of the property is transferred, as of the date provided in the document, regardless of which party has possession of the property. The original copy of the Bill of Sale is then given to the buyer. The seller should retain a copy.
Is a Bill of Sale the same as a receipt?
Often, courts interpret a Bill of Sale as more of a receipt for the property sale than a binding contract. To ensure that the Bill of Sale can be enforced in a court of law, you’ll need to include enough specific language in the Bill of Sale to ensure its legal enforceability.
What is a sale according to the Uniform Commercial Code (UCC)?
Uniform Commercial Code (UCC) Article 2, Section 2-106 defines a sale as “the passing of title to goods from a seller to a buyer for a price.”
What sales are covered under the Uniform Commercial Code (UCC)?
According to Uniform Commercial Code (UCC) Article 2, Section 2-102, the UCC applies to all sales of “goods.” Section 2-105 defines “goods” as:
[A]ll things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (Article 8) and things in action. "Goods" also includes the unborn young of animals and growing crops and other identified things attached to realty as described in the section on goods to be severed from realty (Section 2–107).
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