How To Write A Bill of Sale

A Bill of Sale (also known as a Bill of Sale template or Bill of Sale form) is a legal document that transfers ownership of personal property from a seller to a buyer. Some Bill of Sale documents are only used to transfer personal property, like furniture and equipment. Others can be used to transfer larger and typically more expensive types of personal property, like cars, boats, or motorcycles. For these types of items, using a Vehicle or Car Bill of Sale, Boat Bill of Sale, or a Motorcycle Bill of Sale form is best because these documents will typically require more information to transfer the property.

If the property has been guaranteed as security for a loan, it may be necessary to obtain a release from the party to whom the loan is owed. In such cases, it is advisable to consult with a lawyer.

Here are some of the most common clauses in a Bill of Sale.

Price

The price section of a Bill of Sale describes the full amount of money paid for the property transfer, as agreed upon by the seller and buyer. The transfer price will depend upon the type of property being sold or transferred and any special or custom terms agreed upon by the parties.

The price may or may not include applicable sales tax. There may be an option to specify whether or not sales tax will be included in the total price. The amount of sales tax is different in each state and can vary depending on the goods being sold. Sellers may want to check local laws to determine the amount of sales tax that will apply to their transaction and whether or not to include that price in the total price.

Seller

Information about the seller in a Bill of Sale may include both the seller’s name and address. If the seller is an individual, the seller may be described as an individual and their home address included in the Bill of Sale form, unless the parties agree otherwise.

If the seller is a company, the Bill of Sale may state the company’s legal entity, such as a partnership, limited liability company, or corporation, along with the address for the company’s principal place of business, unless the parties agree otherwise.

Buyer / Purchaser

When describing the buyer or purchaser, a Bill of Sale may include both their name and address. If the buyer or purchaser is an individual, they may be designated as an individual and their home address included in the document, unless the parties agree otherwise.

If the buyer or purchaser is a company, the Bill of Sale may include the company’s legal entity, such as a partnership, limited liability company, or corporation, along with the address for the company’s principal place of business, unless the parties agree otherwise.

Description of Items or Property Being Sold

When describing the items or property being sold in a Bill of Sale template, the property may be described with specificity. For example, if the property being sold is a valuable collection of vinyl records, the seller may want to itemize the following in the Bill of Sale:

Number of records in the collection.

Title of each record in the collection.

Artist information for each record.

Recording date or release date of each record.

General condition of each record.

Property Being Sold As Is

If the seller is selling the property “as is,” then the Bill of Sale may specify this. For example, the seller may mention in an “as is” provision that the property is being sold in its current condition, and the buyer accepts the property as is (or with any existing flaws). In other words, the seller does not make any promises about the property in the Bill of Sale. Instead, the buyer understands that “what they get is what they see.”

When selling or transferring property as is, the Bill of Sale may not include any warranties as to the property (such as the seller warranting the condition of the property), and the seller may not guarantee the quality or condition of the property to the buyer.

Seller Warranties

A warranty section in the Bill of Sale is a promise by the seller, offering additional protections to the buyer. For example, a Bill of Sale’s warranty clause details what property is being sold and gives a guarantee (or warranty) to the buyer about the condition of the property or about the seller’s ownership rights (such as the Bill of Sale warrants that the the seller has full and clear title to the property and can legally sell or transfer the property without any legal obstacles).

However, sellers can also include limited warranties. By including limited warranties, sellers may guarantee that they are the owner of the property and have the right to transfer ownership of the property. A seller can also guarantee that the property is free and clear of any liens and is in “good working condition.”

Buyer Inspection

An inspection provision in a Bill of Sale gives the buyer the opportunity to inspect the property, or alternatively, have the property inspected by a third party. Additionally, the buyer agrees to accept the property in its existing condition after receiving a satisfactory inspection.

Disputes and Attorney Fees

Generally, when a legal dispute arises between the seller and the buyer, both parties pay their own attorney’s fees if the dispute carries forward to litigation (a lawsuit), mediation, or arbitration.

However, both parties may want to check the applicable law to determine if any additional specifics must be added to the dispute/attorney’s fees section of the Bill of Sale. For example, the applicable state law may specify that the non-prevailing party shall pay the reasonable attorney’s fees of the prevailing party.

Enforceability

Often, courts interpret a Bill of Sale as more of a receipt for the property sale than a binding contract. To ensure that the Bill of Sale can be enforced in a court of law, the seller may need to include enough specific language in the Bill of Sale to ensure its legal enforceability.

For example, sellers may want to specifically document the description of the property and the sales price (including or excluding sales tax), and also include any specific state law provisions applicable to the property sale. This may help sellers enforce the terms of the Bill of Sale if necessary.

For example, sellers may want to include the following language for enforceability: “The terms of this Bill of Sale shall bind and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.”

Property Transfer Date

In the property transfer date section of the Bill of Sale template, the parties may specifically describe when the property will be transferred from the seller to the buyer. The parties may include any events that must happen first before the property is transferred, such as the buyer must satisfy all payment terms satisfactorily and/or the parties must sign and date the Bill of Sale before the property is transferred.

Seller and Buyer Signatures

The Bill of Sale should be signed by both parties. After the Bill of Sale is signed by both parties, legal ownership of the property is transferred, as of the date provided in the document, regardless of which party has possession of the property. The original copy of the Bill of Sale should be given to the buyer. The seller should retain a copy.

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