Since its inception, Human society has been based on the concept o ‘give and take’ of resources. When people needed specific resources, they would often exchange them for the ones they had with people who had the required things/resources and were willing to exchange them. This system which predates the invention of money was termed as Barter System. As the human race developed, so did the exchange methods of resources or goods. With the introduction of money as a proper currency of exchange, the whole scenery changed, allowing for a more regulated and systemised trade machinery and commerce to be established.
The whole idea of trade and commerce as we know it today is based on the simple concept of buying and selling goods, and as there were developments in laws regarding the two, the authorities realised the essentiality of laying down proper measures to acknowledge the acts of selling and buying giving way to the concept of a Bill of Sale.
What Is a Written Bill of Sale?
In simple terms, a Bill of Sale is such a document that provides in writing the proof of the transaction of sale of goods which generally results in a change of ownership in property of the said goods. Most often, it is used in case of items or goods that hold a significant value, such as vehicles, land property, aircraft, or even farm equipment and animals.
Generally, this provides you with the basic information regarding the goods/ object being sold. It is used in court as proof that a transaction received full consideration and that the seller gave the buyer the ownership rights to the items listed in the bill of sale.
Therefore one can even consider this as a legal document that signifies that the seller has transferred the ownership of an asset to a buyer. Although a Bill of Sale is not a necessity under every jurisdiction (state), these can still be crucial as they can be used to prevent any future misunderstandings between the buyer and the seller.
How Does a Bill of Sale Work?
Depending on the nature of the transaction, a bill of sale can be very complex or very simple. As it lists the precise goods sold to the customer and the price agreed upon and paid for each, a typical retail purchase receipt can be regarded as a bill of sale. As an illustration, when a futures contract expires, the holder is typically handed a delivery instrument that serves as a bill of sale because it may be exchanged for the underlying asset.
How Do You Write A Simple Bill Of Sale?
A free template or example bill of sale form is frequently offered by some states. There are a few elements that are present in all bill forms, even if your state doesn’t provide a sample format. Below you can have a look at the step-by-step guide to Writing a Bill of Sale;
Date of the Transaction: The first step for you is to remember that your bill mentions the date of the transaction or sale, to be exact.
Description of Goods In Question: It is essential for you to provide a detailed description of the item or goods that are being sold. For instance, if the Bill of Sale is of a car, then mentioning only the name of the car won’t suffice. You will have to mention the year, make, and model of the car, its Vehicle identification number, and other details such as the current mileage and license plate number are also substantial.
Price: A proper Bill of sale has to include the price at which the item is sold. In case the item/goods in question is a gift or a partial gift, then the reduced price may be mentioned on the bill of sale.
Mention The Warranty: Private sales are typically regarded as “as is” or warranty-free transactions. If your contract of sale contains a warranty, you should include it in the bill to avoid future misunderstandings or problems.
Details of the Parties involved: The buyer and seller’s names, addresses, and signatures must appear on your bill of sale form. Above the statement, each party should have a signature confirming that, to the best of their knowledge and belief, the information supplied is truthful and accurate.
Information of Previous Owners: In case the sale is private and of used property, then the name of the previous owner/owners shall be present on the bill.
Method of Payment: The bill has to mention the payment method made for the goods. The payment method can be cash, cheque, in instalments or all at once, credit or a bank deposit.
Other Related Agreements: Any agreements (if present) pertaining to the transaction, such as payment deadlines, penalties for late payments, interest rates, etc., should also be stated in the bill.
Key Terms to Include in Your Bill of Sale
Like any document that holds legal relevance and value, a bill of sale must include certain terms and elements that have to be included to be considered valuable. Most people tend to miss these important terms and it is only later that they realise the importance of that term. Below you will find all the essential terms that one needs to keep in mind while writing a bill of sale:
Name of the Seller: As is quite clear from the previous discussions, a Bill of Sale must have the name of the seller written on it. Also, one has to keep in mind to mention the full name of the seller.
Address of The Seller: It includes all sorts of contact information for the seller, such as his address.
Selling Price: The Selling price of the item/goods must be clearly stated on the bill.
Date of Transaction: It has to mention the exact date the sale took place and the transfer of ownership went into effect.
Name of The Buyer: Information regarding the buyer shall also be present on the bill, such as his full name.
Address of the Buyer: The bill needs to have the contact information of the buyer, such as his address.
In case the item Sold is a Vehicle:
Name of The Vehicle: The name of the vehicle should be listed on the bill of sale in the event of a car sale.
Body Type: The bill of sale shall mention the body type of the being sold.
Title Number: The bill should have the title number mentioned in it.
Vehicle Year: The Vehicle year should be mentioned.
VIN: The VIN should be included in the bill.
Statement Giving correct information: The document should have a statement such as “I declare under penalty of perjury that this information is true and correct.”
Seller’s Signature: Anyone who has not signed a bill of sale is not bound by it legally. Before signing, ensure everyone has read the bill and agrees with its conditions.
Signature of the Buyer: The agreement should be made available to the buyer for review by the seller. In most cases, if the buyer disagrees with any or all of the terms, there is some room for discussion. The agreement can be signed by the buyer after the modifications have been completed.
Other Information: Other information, such as the odometer details of the vehicle, is also important to be mentioned.
Do I Need a Bill of Sale?
As we have said earlier, the requirement or use of a bill varies from jurisdiction to jurisdiction. For instance, The buyer will require the automobile bill of sale to transfer ownership of the vehicle if you are selling your car in Montana without having a copy of the title. In Georgia, on the other hand, you must the bill of sale to obtain a Georgia title, registration, and license plate.
In some cases, the state may also require the sellers to complete a bill of sale to remove the name of the seller from the sold vehicle. By doing this, the seller may avoid liability for the vehicle after it has been sold. This legal risk could result from the car being involved in an accident, committing a crime, or receiving a ticket. Therefore, a difference in rules and regulations changes the need for a bill based on the location/ jurisdiction.
Who Writes a Bill of Sale?
The writing of the bill of sale is again dependent upon the situation. For instance, The seller could draught the bill. When selling an automobile, the dealership may be required by some jurisdictions to furnish the bill. Nonetheless, if the transaction is private, the buyer and the seller may be required to produce and sign a bill of sale. In this scenario, a seller could commission a bill of sale from a contract’s attorney.
Get Help With a Written Bill of Sale
We understand that getting in all of this information about the bill may not be enough and that one may find it difficult and much complex to implement, which is why we are here. Find at legamart the perfect attorney and legal counsel specialising in sales laws and get all the required assistance and help with your bill.