When you are buying or selling personal property – especially high-ticket items such as vehicles, furniture, or equipment – you need a bill of sale.
A bill of sale gives written details of the property that is being transferred from one party to another and serves as legal evidence of the transaction. These documents can be as simple or as complex as is needed for the transaction, but there are two main types of bills of sale – conditional and absolute. This article will explain how each one works and how and when you should have one.
Conditional Bill of Sale
As its name implies, a conditional bill of sale is used for transactions when the ownership of the property in question must meet certain conditions. This type of bill of sale serves as a form of security to a lender.
For example, if you borrowed money from a lender in order to buy a car, the car remains in your possession as long as you honor the terms of the loan agreement. Failure to make payments on time may give the lender the right to repossess the vehicle.
Another example of a conditional bill of sale is a dog breeder who sells a puppy on the condition that the buyer spays or neuters the animal at six months of age. Another requirement of the bill of sale might be that the buyer agrees to notify the seller if planning to find the dog a new home.
Terms to Include in a Conditional Bill of Sale
Since, by its very nature, a conditional bill of sale depends on a set of conditions, the document must clearly state those requirements.
Here are some of the terms to include:
- Property type. A description of the property in question, including its condition or the quantity of property that is part of the transaction.
- Payment. The payment terms for the property, including any deposit or down payment (if applicable) and the date when the final payment is due.
- Interest. If the purchase has payment installments, the conditional bill of sale should state the amount of interest that will be collected over the length of the contract.
- Delivery. The document should include how and when the property will be delivered or how and when the buyer can pick it up.
- Title transfer. The contract should specify the date the title will transfer to the buyer once the conditions are met.
- Default. A conditional bill of sale should include the details of what will happen if the buyer fails to meet the conditions of the contract.
- Repossession. If the buyer defaults on the contract, the document should include the procedure the seller will follow to recover the property. For example, this step might include a clause that allows the seller the right to enter the buyer’s premises to take possession of the property in question.
Absolute Bill of Sale
An absolute bill of sale does not have terms or conditions that must be met and does not represent any form of security. This type of bill of sale serves as a record of the transfer of goods.
The transfer is completed without any payments due or restrictions after it is finished. For example, if you are paying in full for a used car, you would use an absolute bill of sale at the time of purchase. Once the transaction is complete, you own the vehicle, and the seller no longer has any rights to it.
Read more:How to Write a BOS for a Used Car
Terms to Include in an Absolute Bill of Sale
Here are the terms that should be included in an absolute bill of sale.
- Location. The contract should specify the location of the property at the time of the sale.
- Names. The document should include the full names, signatures, and addresses of all individuals involved in the transaction, including all buyers and sellers.
- Date. The effective sale date should be listed in the contract.
- Description. The absolute bill of sale should have a clear description of the property, including any serial or identification number.
- Purchase price. The documents should list the total amount that the buyer pays for the property. The form of payment should be listed as well.
- Condition. An essential part of the absolute bill of sale is the item’s condition. “As is” condition means that the seller offers no guarantees that the property will continue to operate. For example, a signed “as is” bill of sale means the seller is not responsible if a car breaks down after the transaction. The seller also cannot make any other monetary demands on the buyer.
You can get a template for a bill of sale to secure your transaction of property at LawDistric. You can use the document for any property type, including a car, boat/vessel, RV, motorcycle, trailer, furniture, artwork, firearm, or livestock. Having a detailed bill of sale can go a long way to giving both buyer and seller peace of mind and promote a smooth transaction.
FAQs about Conditional and Absolute Bill of Sale
-
Is An Absolute Bill of Sale Secure?
An absolute bill of sale is a legal document that recognizes the transfer of ownership of a piece of property from a seller to a buyer. It does not represent any form of security.
-
Is it Necessary to Get a Bill of Sale?
You might need a bill of sale in order to register your car in some states, but requirements vary from state to state. Some states require car buyers to have a Division of Motor Vehicles (DMV) bill of sale, while others allow you to draft your own as long as it meets local requirements. Before you purchase a used car, it’s a good idea to check your state’s requirements.
Even if your state’s DMV does not require a bill of sale, you should have one for your own records.
-
Is A Bill of Sale a Binding Contract?
A bill of sale is a legally binding document. Using a bill of sale ensures that both buyer and seller understand the terms of the transaction and helps prevent any disputes from arising. A bill of sale can be hand-written or typed. The signature of both parties, the amount of money paid for the goods by the purchaser, and the terms of the transfer of ownership make the contract legally binding.
-
Do You Need to Get a Bill of Sale Notarized?
A bill of sale can be used for any type of property transaction. Most states do not require a notary public to witness the signing of the document. The states that do require notarization are Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, and Montana.
When you are buying or selling personal property – especially high-ticket items such as vehicles, furniture, or equipment – you need a bill of sale.
A bill of sale gives written details of the property that is being transferred from one party to another and serves as legal evidence of the transaction. These documents can be as simple or as complex as is needed for the transaction, but there are two main types of bills of sale – conditional and absolute. This article will explain how each one works and how and when you should have one.
Conditional Bill of Sale
As its name implies, a conditional bill of sale is used for transactions when the ownership of the property in question must meet certain conditions. This type of bill of sale serves as a form of security to a lender.
For example, if you borrowed money from a lender in order to buy a car, the car remains in your possession as long as you honor the terms of the loan agreement. Failure to make payments on time may give the lender the right to repossess the vehicle.
Another example of a conditional bill of sale is a dog breeder who sells a puppy on the condition that the buyer spays or neuters the animal at six months of age. Another requirement of the bill of sale might be that the buyer agrees to notify the seller if planning to find the dog a new home.
Terms to Include in a Conditional Bill of Sale
Since, by its very nature, a conditional bill of sale depends on a set of conditions, the document must clearly state those requirements.
Here are some of the terms to include:
- Property type. A description of the property in question, including its condition or the quantity of property that is part of the transaction.
- Payment. The payment terms for the property, including any deposit or down payment (if applicable) and the date when the final payment is due.
- Interest. If the purchase has payment installments, the conditional bill of sale should state the amount of interest that will be collected over the length of the contract.
- Delivery. The document should include how and when the property will be delivered or how and when the buyer can pick it up.
- Title transfer. The contract should specify the date the title will transfer to the buyer once the conditions are met.
- Default. A conditional bill of sale should include the details of what will happen if the buyer fails to meet the conditions of the contract.
- Repossession. If the buyer defaults on the contract, the document should include the procedure the seller will follow to recover the property. For example, this step might include a clause that allows the seller the right to enter the buyer’s premises to take possession of the property in question.
Absolute Bill of Sale
An absolute bill of sale does not have terms or conditions that must be met and does not represent any form of security. This type of bill of sale serves as a record of the transfer of goods.
The transfer is completed without any payments due or restrictions after it is finished. For example, if you are paying in full for a used car, you would use an absolute bill of sale at the time of purchase. Once the transaction is complete, you own the vehicle, and the seller no longer has any rights to it.
Read more:How to Write a BOS for a Used Car
Terms to Include in an Absolute Bill of Sale
Here are the terms that should be included in an absolute bill of sale.
- Location. The contract should specify the location of the property at the time of the sale.
- Names. The document should include the full names, signatures, and addresses of all individuals involved in the transaction, including all buyers and sellers.
- Date. The effective sale date should be listed in the contract.
- Description. The absolute bill of sale should have a clear description of the property, including any serial or identification number.
- Purchase price. The documents should list the total amount that the buyer pays for the property. The form of payment should be listed as well.
- Condition. An essential part of the absolute bill of sale is the item’s condition. “As is” condition means that the seller offers no guarantees that the property will continue to operate. For example, a signed “as is” bill of sale means the seller is not responsible if a car breaks down after the transaction. The seller also cannot make any other monetary demands on the buyer.
You can get a template for a bill of sale to secure your transaction of property at LawDistric. You can use the document for any property type, including a car, boat/vessel, RV, motorcycle, trailer, furniture, artwork, firearm, or livestock. Having a detailed bill of sale can go a long way to giving both buyer and seller peace of mind and promote a smooth transaction.
FAQs about Conditional and Absolute Bill of Sale
-
Is An Absolute Bill of Sale Secure?
An absolute bill of sale is a legal document that recognizes the transfer of ownership of a piece of property from a seller to a buyer. It does not represent any form of security.
-
Is it Necessary to Get a Bill of Sale?
You might need a bill of sale in order to register your car in some states, but requirements vary from state to state. Some states require car buyers to have a Division of Motor Vehicles (DMV) bill of sale, while others allow you to draft your own as long as it meets local requirements. Before you purchase a used car, it’s a good idea to check your state’s requirements.
Even if your state’s DMV does not require a bill of sale, you should have one for your own records.
-
Is A Bill of Sale a Binding Contract?
A bill of sale is a legally binding document. Using a bill of sale ensures that both buyer and seller understand the terms of the transaction and helps prevent any disputes from arising. A bill of sale can be hand-written or typed. The signature of both parties, the amount of money paid for the goods by the purchaser, and the terms of the transfer of ownership make the contract legally binding.
-
Do You Need to Get a Bill of Sale Notarized?
A bill of sale can be used for any type of property transaction. Most states do not require a notary public to witness the signing of the document. The states that do require notarization are Louisiana, Nebraska, Maryland, New Hampshire, West Virginia, and Montana.
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