When selling or purchasing an item, it is crucial to get a receipt to show your involvement in the transaction. This is why a bill of sale is mandatory. A bill of sale is crucial because it highlights the agreement between two parties to transfer ownership of a particular property or item.
Therefore, a bill of sale is necessary if you want to avoid fraud or deceit in the business world. With a bill of sale, you can easily show evidence of a sale or purchase to any relevant authorities if need be. In addition, a bill of sale shows an absolute transfer of ownership between two parties.
This article will teach you more about the bill of sale form, when and why you should use it, and the different types.
Bill of Sale Templates
You can download the following templates for free:
Bill of Sale
A bill of sale is a record or document used to show proof of a sale between a seller and a buyer.
The bill of sale is used to document the sale of things like cars and properties to an interested buyer. Therefore, the details of the items or assets transferred to the buyer should accurately be documented in the bill of sale.
A bill of sale is only practical and helpful when the buyer makes total payments and accepts the conditions in which the bought item(s) come in during the sale. The buyer and the seller should retain a copy of the bill of sale after the completed transaction.
Alternative names
A bill of sale may also be referred to as a:
- As-is bill of sale
- Sales receipt
- Proof of purchase
- Proof of payment
- Sales slip
- Proof of sale
2 Forms of Bill of Sale
A bill of sale commonly comes in two forms:
Absolute bill of sale
An absolute bill of sale gives the buyer total rights to the items and properties without restrictions and limitations. The absolute bill of sale does not act as a warranty for the purchased products and assets. Still, it provides proof of the transaction and documents the details of the involved parties.
An absolute bill of sale is an agreement that covers the sale of assets. The common law of contract governs the agreement. Notably, an absolute bill of sale provides a detailed payment method and states the condition of the assets to be purchased.
Conditional bill of sale
A conditional bill of sale is an agreement where the buyer borrows money to purchase the assets on sale. However, the purchased items or assets will be temporarily owned by the lender as a form of security for the payment.
The conditional bill of sale gives the lender the right to confiscate or claim possession of the bought items or properties as collateral for the bill covered.
When and Why a Bill of Sale is needed
Before including a bill of sale in any transaction, it is crucial to know when it is necessary to use and why you should use it:
When
A bill of sale is mandatory, especially if you want to sell or purchase an item like a car. In most cases, a bill of sale is used when one is selling an item privately. This provides proof of the transaction and helps to avoid any unnecessary issues related to untrustworthy transactions.
A bill of sale can be used to transfer ownership of things like vehicles, water vessels like boats, flying machines like aircraft, guns and firearms, electronics like laptops, personal items like jewelry, equipment like farm tools, pets, and so much more.
Note: A bill of sale cannot be used to transfer or sell real estate, land, or a business. There are agreement documents that are designed to authenticate such transactions.
Why
A bill of sale is essential as it provides proof of a transaction. In addition, the bill of sale is important because it documents the following:
- It can be challenging to know if the buyer made the payment or if the items were transferred to the new owner without proper documentation. Therefore, a bill of sale is essential, especially if the items were paid using cash. Therefore, a bill of sale is designed to show the items under purchase, the parties involved, and the exact date the transaction was completed.
- A bill of sale comes in handy whenever a tax evaluation is needed as it creates a paper trail. For example, suppose the transaction was purposed to generate a profit. In that case, a bill of sale is necessary as it will show the item(s) sold, the amount generated during the transaction, and the parties involved.
- It is easy for a buyer to claim they were sold a low-quality or defective item. However, with the bill of sale, the seller can show that the item(s) was presented to the buyer as-is. Additionally, the bill of sale will prove that the buyer accepted the item in its current condition.
- The bill of sale proves that the parties agreed on the amount to be paid, the payment method, and the period in which the payment was to be made. If the buyer fails to comply with the payment agreement, the seller can use the bill of sale to claim the outstanding balance.
- If the item purchased is insurable, the buyer must present a bill of sale to the insurance company to prove that they are the rightful owners. Therefore, a bill of sale can be mandatory when you must prove an item’s ownership to an insurance company.
How Does it Work?
A bill of sale is used to document the transfer of ownership for a specific item. Therefore, a bill of sale can be complicated or straightforward, depending on the transaction. A bill of sale should accurately record all purchased items, the amount paid for each item, the payment method and period, and the parties involved.
Both parties must get a copy of the bill of sale immediately after completing the transaction. The bill of sale should contain accurate details and be handed out after completing the transaction.
Key Terms
When it comes to the bill of sale form, there are specific vital terms you need to know to ensure that you prepare a proper and effective bill of sale. These key terms include the following:
As-is
As-is is a term used within the bill of sale form to indicate that the item bought has no warranty. Therefore, the buyer has accepted the item in its current condition.
Buyer
This is the purchaser or the individual interested in a particular item and willing to pay a certain amount in return for the product or item.
Gift
This item is given to a buyer or a potential buyer without expecting payment or reimbursement.
Notary public
This is an impartial individual who acts as a 3rd party public officer. Their task is to verify the involvement of the buyer and the seller in the transaction. In addition, they oversee the transaction and ensure both parties sign the bill of sale once the transaction is completed. Notary public officers are primarily available in banks or through a professional service.
Payment
This is the amount the buyer uses to pay for the item(s) they are interested in.
Seller
This is the individual or organization that offers the buyer with item(s) for purchase.
Trade-in
This is a process where a buyer presents the seller with an item in exchange for the seller’s item. Additionally, this transaction can be conducted when a buyer wants a considerable discount. Usually, this type of transaction is common amongst car dealers where a buyer trades in their car for a better car and tops some cash.
Bill of Sale Forms
For a bill of sale to be effective, it needs to be precisely designed and prepared to meet the demands of the transaction. A well-crafted bill of sale will allow you to quickly include all the essential details. Therefore, if you want to create a perfect bill of sale, you should try out our bill of sale forms.
We have a bill of sale template that will help you effortlessly design a precise bill of sale form that will fit all the critical details. In addition, you can freely create access and download our bill of sale forms from our website.
General bill of sale
A general bill of sale is a form that a buyer primarily uses to show that they are the rightful new owners of the items in question. The general bill of sale is used as a receipt to represent the sale of a personal item or asset in exchange for money or another item. In addition, this bill of sale form is used to document the transaction between the involved parties.
Motor vehicle bill of sale
A motor vehicle bill of sale contains the purchase terms and the vehicle’s condition. After the transaction has been agreed, completed, and signed, the buyer can use the bill of sale form in their local Department of Motor Vehicle (DMV) to prove that they are the new owners of the vehicle. This bill of sale should only be signed after the buyer has made total payments to the seller.
Aircraft bill of sale
An aircraft bill of sale is used to document a change of ownership of an aircraft. This bill of sale records and authenticates the sale of an airplane. Therefore, it is important to include accurate and necessary information in the bill of sale because it will be used when enlisting the aircraft under the Federal Aviation Act.
The aircraft bill of sale should include the make and version of the airplane, its price, and the details of both the buyer and the seller.
“As-is” bill of sale
The as-is bill of sale is a document that shows the buyer has accepted the purchased item in its current state. This means the buyer has accepted the item’s ownership with all its visible and non-visible faults. In this case, the buyer is not presented with any warranty by the seller. Therefore, the change of ownership is made immediately after the as-is bill of sale form has been signed by both parties.
ATV bill of sale
An All-Terrain Vehicle bill of sale is a document that indicates the legal purchase of an ATV. This bill of sale will indicate the accurate details of the transaction, which include the information of the seller, the buyer, the purchase price, and the condition and registration details of the ATV.
Bicycle bill of sale
A bicycle bill of sale is a document used to record a change of ownership of a bicycle. The bill of sale contains the accurate details of the seller, the buyer, the condition and registration of the bicycle, and the amount paid. The involved parties sign the bicycle bill of sale after completing the transaction.
Boat bill of sale
A boat bill of sale is a form used to indicate the legal sale and purchase of a boat or a watercraft. The billing form will indicate the details of the buyer, the seller, the purchase price, and the condition of the boat. This bill of sale form is used to show a change of ownership. Additionally, this bill is required for the legal registration of the boat in most jurisdictions.
Business entity bill of sale
A business bill of sale is a record used to document the sale and purchase of a business and all its resources. This bill indicates the change of ownership while highlighting the details of the buyer and the seller.
The business bill of sale is used to lay the terms of the sale. Also, it is used to mark the completion of the transaction.
Cat/kitten bill of sale
A cat/kitten bill of sale is a document used to show a change of ownership of a cat/kitten. In addition, the bill is used to show the purchase of the cat/kitten was legal. This bill of sale is usually signed after the buyer has made total payments to the seller. Notably, a witness, usually a certified and qualified notary public, is required during the transaction.
After the sale is complete, the seller is no longer responsible for the care and maintenance of the animal.
Dog/puppy bill of sale
A dog/puppy bill of sale is a legal document used to show a change of ownership of a dog/puppy. Usually, the breeder or seller and the buyer agree on a price before continuing the transaction. For a puppy not ready to be separated from the mother, a deposit is usually paid, and the transaction is completed on a later day. For a big-sized dog, the change of ownership can be completed on the same day.
Equipment bill of sale
An equipment bill of sale is a document that records the legal sale and purchase of all types of equipment. The bill of sale usually indicates the equipment’s condition and exact price. This bill of sale form may be used on several types of equipment which include:
- Home equipment like ladders
- Office equipment like computers
- Kitchen equipment like knives
- Entertainment equipment like lights
Furniture bill of sale
A furniture bill of sale is a form used to document the sale or purchase of all types of furniture. The furniture includes both outdoor and indoor pieces. The bill of sale is provided as a receipt to the buyer once the transaction is completed. The seller should also retain a copy of the form for accounting purposes.
Gun/firearm bill of sale
A firearm bill of sale is a record showing the legal change of gun ownership. The bill will document the accurate details of both the seller and the buyer. A firearm dealer is responsible for ensuring that they sell the guns to individuals with no criminal record. Selling a personal firearm does not have the same legal responsibility as purchasing a gun from a dealer.
Golf cart bill of sale
The golf cart bill of sale is a document that shows the transfer of ownership of a golf cart. This transaction happens in exchange for money or trade. Usually, the buyer must complete the payment before receiving the golf cart. The bill form is signed after the buyer has made the total payments.
Horse bill of sale
A horse bill of sale, also known as equine, is a record that documents the sale or purchase of a horse. Before the purchase is completed, the horse will be medically examined to ensure that it is in good health. However, the buyer must deposit if the animal requires medical attention.
Once the buyer is content with the animal’s condition, full payment will be made, and the bill of sale will be signed immediately.
Jet Ski bill of sale
A Jet Ski bill of sale is a document that shows a legal sale or purchase of a jet ski. Before the ownership is transferred, an inspection is conducted on the Jet Ski to verify its condition. In this case, the buyer must place a deposit while the watercraft undergoes inspection and maintenance.
However, an as-is option is viable if the buyer is willing to accept the Jet Ski in its current condition. The involved parties sign the bill of sale after the purchase is complete.
Livestock bill of sale
A livestock bill of sale is a document that records the sale or purchase of all types of farm animals. Before the purchase is completed, the buyer has the right to medically examine the animals and ensure they are in perfect health. If the livestock needs further inspection, the buyer will need to set a date of purchase and make a deposit.
If the animals meet the buyer’s demands, the purchase can be finalized, and the bill of sale signed by both parties. Note that a third party may be required for these types of transactions.
Mobile home bill of sale
A mobile home bill of sale is a document that shows a legal agreement between a seller and a buyer on the sale and purchase of a mobile home. After pinpointing a mobile home, the buyer may provide a deposit to the seller while the mobile home undergoes total inspection. After the assessment, the buyer is obligated to complete the payment.
After the transaction is complete, it is recommended that a witness be involved during the signing of the bill of sale.
Moped/scooter bill of sale
A moped bill of sale is a document that indicates a change of ownership for a scooter either through cash payment or trade. Before an agreement is reached between the seller and the buyer, the moped is thoroughly inspected to ascertain its current condition. This is after the buyer has placed a deposit for the moped. If the buyer is satisfied with the current state of the scooter, then the transaction will move to the next phase.
Motorcycle bill of sale
A motorcycle bill of sale is a document that indicates a sale or purchase of a motorcycle. This bill of sale form shows proof of a legal change of ownership for a motorcycle. A deposit is required if the buyer wants the motorcycle to be examined before the transaction is completed; however, if the transaction is subjected to an as-is condition if the buyer accepts the current condition of the motorcycle.
Both parties normally sign the motorcycle bill of sale after an agreement has been reached and the payments completed.
Notarized bill of sale
A notarized bill of sale is a form used to document the legal change of ownership of personal items like cars. In most cases, a notarized bill of sale is overseen and witnessed by a qualified and authorized notary who makes any transaction process legal. This bill of sale is supposed to describe the items sold or purchased fully. The form should contain the full details and signatures of both the seller and the buyer. Note that a notary public will witness the transaction.
RV bill of sale
An (RV) bill of sale is a form that highlights a change of ownership of a recreational vehicle. This transaction sees the seller getting paid with cash or trade. Before the transaction is completed, the buyer and the seller should agree on the price of the RV and the payment method. If any inspections are needed, the buyer must place a deposit as a security measure. The form should contain the vehicle’s current state and identification number (VIN). These details are necessary during the registration process under the new owner.
Tractor bill of sale
A tractor bill of sale is a record that indicates the sale or purchase of a tractor. If any inspection is needed before the completion of the sale, the buyer is obligated to deposit to secure the tractor. However, the tractor can be sold as-is if the buyer accepts the current state of the tractor. This means the seller will not be liable for any repairs or maintenance after completing the transaction.
After the deal is done, both the seller and the buyer should retain a copy of the bill of sale to show proof of the change of ownership.
Trailer bill of sale
A trailer bill of sale is used to show the sale or purchase of a trailer. The form is used to indicate the agreement made between the seller and the buyer. The bill will highlight the current state of the trailer, the price agreed upon, and the details of the involved parties.
The buyer will need the bill of sale when registering the trailer in the department of motor vehicles. Note that the signatures of both the seller and the buyer should be present to ascertain the completion of the transaction.
Frequently Asked Questions
What is an “as is” bill of sale?
An “as is” bill of sale refers to a document that allows the seller to avoid any liability associated with flaws in the item being sold, provided that they have not lied or hidden these imperfections. This is because an “as is” means that the buyer will accept the item being sold in the condition that it is currently in, protecting the seller from refunds once the buyer purchases the item. This means that the buyer will be willing to accept the item with its flaws and no warranties or guarantee of quality from the seller.
Do I need a bill of sale to give the property as a gift?
You need a bill of sale to give property as a gift, even between family and friends. This document is meant to show that ownership has been transferred. To ensure you correctly use a bill of sale to give property as a gift, you can include the sale price as a small amount, such as $1.00 or $10.00.
Can I use a bill of sale for selling services?
You cannot use a bill of sale for selling services as this document is meant to act as proof of ownership transfer of physical goods. However, in the case of selling services, you can use documents like a Service Agreement or an Independent Contractor Agreement.
Who signs a bill of sale?
Some States require parties, the buyer and the seller, to sign the bill of sale, especially for items such as vehicles. However, only the seller will have to sign the bill of sale for items such as furniture. To determine whether either party or just one party should sign a bill of sale, check on the laws regarding a bill of sale in your jurisdiction.
Does my bill of sale need notarization?
States such as Louisiana, Maryland, Montana, Nebraska, West Virginia, and Wyoming will require you to get your bill of sale notarized, especially for items such as vehicles. For other States, you can choose whether or not to have the document notarized. Notarization helps add an extra layer of protection and verification. It also increases the authenticity of the document.
Does a bill of sale have to be recorded?
A bill of sale does not have to be recorded but is required as proof of ownership.
May I use a bill of sale for the sale of a dog?
You can use a bill of sale for the sale of a dog as it is a pet that is considered physical property. This means that its ownership can be transferred from one person to another.
What does with or without warranties mean?
A bill of sale with warranties requires the seller to assure the buyer that the item or property they are buying is theirs and they have the right to sell it. Also, it means that the seller is in a position to transfer ownership of the property to the buyer and defend them from others who want to claim it.
A bill of sale without warranties quitclaims the property and lacks the warrant title. This means that you cannot prove property ownership or want to warrant title to the property.
What are the execution and witness requirements?
The execution and witness requirements concerning the bill of sale are all governed by State law and tend to differ from State to State. While some States require that a bill of sale be witnessed, others need it notarized. The other States do not require witnesses or notarization. The main thing is to ensure that your bill of sale form adheres to the State laws to ensure that they are not viewed as invalid.