What Is a Bill of Sale?
A bill of sale is a document that details in writing a sale of goods or transfer of property from one party to another. A bill of sale serves as legal evidence that full consideration has been provided in a transaction and that the seller has transferred the rights to the assets detailed in the bill of sale to the buyer.
How a Bill of Sale Works
A bill of sale can be quite complex or quite simple—depending on the type of transaction. A typical retail purchase receipt can be considered a bill of sale, as it details the specific goods that have been sold to the buyer and the specific price that was agreed to and paid for each. For example, the holder of a futures contract is generally given a delivery instrument, which acts as a bill of sale, in that it can be exchanged for the underlying asset when the futures contract expires.
When conducting transactions for assets worth substantial sums of money, such as an automobile, it is important to make sure the bill of sale is completed properly and obtained at the time of sale.
A bill of sale generally takes the form of the following:
- An absolute bill of sale does not represent any form of security, but rather, are simply documents evidencing assignments, transfers and other assurances of personal chattels, which are substantially no more than mere contracts of sale of goods covered by the common law of contract and the sale of goods law.
- A conditional bill of sale represents any assignment or transfer of personal chattels to a person by way of security for the payment of money. The conditional bill of sale creates a security in favor of the grantee of the bill whereby the grantee is given personal right of seizure giving right to a security interest of a possessory nature.
- A bill of sale is a legally recognized documented record of a transaction.
- A bill of sale may take the form of absolute or conditional depending on the terms therein.
- Today, bill of sale is commonly used when transferring title to property from one person to another.
A Brief History of Bills of Sale
The term “bill of sale” originally referred to any writing by which an absolute disposition of personal property for value was effected or evidenced. Because a bill of sale is technically independent of any legislation under U.S. common law, they were prone to deceit and fraud before advancements in contract law and digital record keeping systems.
Today, the bill of sale is a commonly written instrument showing the voluntary transfer of a right or interest or title to personal property, either by way of security or absolutely, from one person to another without the actual physical possession of the property leaving the owner and being delivered to the other party.