LEGAL DICTIONARY

Bill of Sale

A bill of sale is an official legal document that can be used to create a record of a sale of a valuable item. This allows you to certify the transfer of ownership between you and a buyer.

This article explains how a bill of sale can be used to mark a transaction between a buyer and seller officially. It also describes how these documents can vary in certain situations as well as how you can create your own bill of sale from scratch.

What is a Bill of Sale?

A bill of sale is an official certification that can indicate the transferal of ownership between 2 parties. It is used to mark the sale of many different types of property including:

  • Cars
  • Motorcycles
  • Real estate
  • Aircrafts
  • Boats
  • Horses
  • Firearms (in some states)
  • Livestock

Types of Bill of Sale

Bills of sale can be used for a wide variety of assets. Therefore there are some variations between the types of these legal forms that are available. These also vary from state-to-state depending on the individual laws and legislation on the sale of property.

Most generic bills of sale templates will include the following components:

  • The purchase date
  • The addresses of both the buyer and seller
  • The amount paid for the transfer of ownership
  • A brief description of the sold item
  • A guarantee that the item is free of claims and offsets
  • Representations or warranties
  • Signatures from the buyer, seller, and a notary public (if your state requires notarization)

As the rules of the sale of goods are different in each state it is essential to ensure that your bill of sale fits the specific local laws. Using a professional pre-made legal document template, however, can make this process a little easier. LawDistrict’s own bill of sale template, for example, allows you to select the state you’re making the transaction in to conform to these requirements.

Vehicle Bill of Sale

A vehicle bill of sale is a requirement for the transfer of ownership of a car in most (but not all) states. This can be a necessary requirement when completing the title transfer paperwork at the Department of Motor Vehicles (DMV).

Be aware however that in some states, the DMV may insist on the use of their own proprietary template to draft the bill of sale. Other states however only require that the document meets state regulations.

In addition to the main details listed in the section above, a vehicle bill of sale will also need the following information:

  • The type of vehicle (i.e. motorcycle, car, boat, etc)
  • The make, model and production year of the vehicle
  • The vehicle’s odometer reading
  • The hull number
  • The engine serial number
  • The vehicle’s registration number

Quitclaim Bill of Sale

A quitclaim bill of sale works in a similar way to a quitclaim deed in real estate. This allows the seller to transfer the ownership of an item of property even if they can’t guarantee proof of ownership.

This however creates some risks for the buyer. In this situation, only the rights held by the seller may be transferred. If they are not in fact the full owners of the property (i.e. they are the leaseholder) the buyer has no grounds for legal recourse.

Warranty Bill of Sale

A warranty bill of sale is a more secure form of property exchange. It allows the transfer of ownership whilst ensuring that the seller has title ownership of the item being sold in question. If a pre-existing claim to the property is made after the transaction is completed the seller is legally liable to the buyer.