With the number of private deals increasing in the USA, sellers and buyers of used items want to arrange their transactions legally and securely. This is what a bill of sale offers, being a document proving the transfer of ownership and stipulating the deal’s terms for reference. Both parties of the transaction receive a copy of the form in order to have legal proof of the agreement. But still, even looking at the FormsPal’s downloadable template, you might experience some confusion about how this document works, in what deals it is appropriate, and what items it does not cover. Here is a short FAQ section for your assistance, covering the most common questions regarding the use of bill of sale FAQs in the private transaction practice.
What is a bill of sale?
A bill of sale is a legal document used in all sorts of transactions. It covers significant transaction elements and protects the parties’ interests, proving that the transfer took place and identifying the items sold.
When is it appropriate to use a bill of sale?
You can compose the bill of sale if you are engaged in a private transaction with another person, without the involvement of dealers or official sellers. The document can be used for stipulating the terms of sale involving watercraft, animals, firearms, furniture, equipment, motor vehicles (cars, motorcycles), etc.
What is the bill of sale’s expiry date?
The bill of sale does not expire because it is a contract for a sale/purchase of some item of value between the seller and the buyer. Once the new transaction takes place with the same item, ownership changes, but the terms on which the former transaction took place remain unchanged.
Can a bill of sale serve as proof of ownership?
No, a bill of sale only does not serve as proof of the item’s ownership. If the item in question is a vehicle, for instance, its ownership is proven only with the possession of title for it. A bill of sale is only a proof of ownership transfer on specific terms, while the new owner of the vehicle can resell it to another person shortly after the purchase.
What should a bill of sale contain to be valid?
For the bill of sale to hold legal force, it has to include the deal’s date, the object’s description, the indication of the price paid for the item, full names and addresses of both involved parties (buyer and seller), and their signatures. In most cases, the deal’s parties also prefer to notarize the bill of sale so that the document has a more solid legal standing and can be used as legal evidence proving the deal.
What are the document’s major components?
The key components that all bills of sale contain are:
- The date on which the transaction took place
- Description of the item sold/bought, including the year of its production, its model, and any distinguishing characteristics
- The price at which the deal takes place
- Warranty provision (whether any active warranty still covers the item, or the seller provides extended maintenance or warranty coverage)
- Complete identifying data of the seller and buyer (name, address, signatures)
What’s the difference between a conditional and an absolute bill of sale?
Absolute bills of sale presuppose the unconditional transfer of the item’s ownership from the seller to a buyer, with no specific conditions applying upon the deal’s finalization. A conditional bill of sale presupposes meeting some additional requirements for the ownership to be sustained. A classic example of a conditional agreement is the purchase of some item with borrowed money. In this case, the buyer remains the item’s owner only if they issue regular payments to the lender. If the borrowing deal is violated and the lender fails to pay the debt off, the lender has the ownership right for the bought item.
In what cases is the use of a bill of sale irrelevant?
Bills of sale are typically not written for the transfer of real estate ownership. Such commercial transactions are more complex and cannot be performed as private deals. Service provision is also not a subject for a bill of sale coverage, as services are intangible and cannot be evaluated in such contractual terms. The document is also rarely used with small-scale sales, such as musical instruments, clothing, or household items. The price of such things is too low to bother with additional legal documentation.
What does “as-is” mean in the bill of sale?
If you buy a used item, you typically accept it in the “as-is” condition, meaning that you are aware of and agree with all its wear-and-tear and imperfections. Used items usually cost less precisely because of their condition. The buyer’s task is to evaluate wear and tear signs, deciding for themselves whether this condition is reasonably priced.
What items can a bill of sale cover?
As a rule, bills of sale are completed for transactions with motor vehicles, watercraft, aircraft, animals, furniture, equipment, and firearms. Any items of value, except for real estate, can be a subject of a private deal covered by a bill of sale.