A bill of sale is a legal document between a buyer and a seller regarding the transfer of ownership of the seller’s goods in exchange for cash or trade. This document acts as a trade receipt between two parties to prevent conflicts between buyers and sellers.
Bill of Sale or Sales Bills are widely used as legal evidence for the transfer of ownership of a product, personal property, or vehicle from one person to another. Overall, the Bill of Sale refers to a documented and legally recognized record of transactions.
What is a Bill of Sale?
Definition: A bill of sale is defined as a documented legal evidence, or receipt detailing a transaction between a seller and a buyer in which the seller transfers ownership of the product or personal property to the buyer. It is a legal document and is issued upon completion of a transaction transaction.
The main reason for drafting a bill of sale is to avoid frivolous conflicts between the seller and the buyer, and to serve as written evidence to resolve the issue. A bill of sale is essential when you want to sell your personal property, vehicle, or anything else that belongs to you personally.
Importance of Bill of Sale
A Bill of Sale is a recorded legal document that shows the details of a transaction. It contains all information regarding the sale of any goods, as well as the transfer of any property, from one party to another. It acts as an agreement between the seller and the buyer.
Bill of Sale This reduces the possibility of disagreement between two trading parties and helps any person or organization maintain transparency regarding trade.
A bill of sale secures the transfer of any property or sale item by compiling proper documents to prevent misunderstandings between seller and buyer.
Indeed, a Bill of Sale is a useful aspect of any transaction that requires legal assistance.
Key features of Bill of sale include:
- A Bill of Sale is a legal documentation between two parties to transfer ownership in exchange for the same property or money
- This is a legal document to avoid further misunderstanding between the two parties
- Bill of Sale also known as sales receipt, sales proof
History of the Bill of Sale
Bills of Sale have been common as common law since at least the Middle Ages. Bill of Sale is commercially found in the shipping industry.
The need for this document grew when the general public began to own more personal items in the Victorian era, this Bill of Sale became popular as a form of consumer credit.
The Bill of Sale was initially linked to a written document containing evidence of absolute disposition of value-laden personal property.
But because this Bill of Sale has no legal basis under US common law, there is so much fraud and fraud going on.
For this reason, Bill of Sale laws were introduced to limit their abuse.
The first of these laws was the Bills of Sale Act 1854 which was later repealed and re-enacted and a new law emerged as the Bills of Sale Act 1878. Then further evolution led to the Bills of Sale Act 1882.
Several definitions of Bill of Sale or Bill of Sale during its evolution are also quite important in describing the significance of its boom. According to the Black Law Dictionary-
Bill of sale is a tool to convey private property rights, absolutely or with guarantee.
Omotola defines a Bill of Sale as a form of legal mortgage on goods, while Bullen and Leake and Jacobs define it as-
A document that transfers ownership interest in personal property from one individual (“grant giver”) to another (“grant recipient”), without ownership being transferred to the grantee.
Type of Bill of Sale
There are two types of Absolute Bill of Sale & Conditional Bill of Sale. Absolute Bill of Sale does not offer any security. It’s just a simple proof of a transaction.
But the Conditional Bill of Sale, on the other hand, provides security regarding payment. Let’s have a look at the details of both-
1. Absolute Bill of Sale
The Absolute Bill of Sale is not provided with any type of security.
Because only documents are used to act as proof of transfers, assignments and other guarantees of private ownership.
Absolute Bill of Sale can be understood as a contract of sale of goods under the law of sale of goods or the law of general contracts.
2. Conditional Bill of Sale
This type of Conditional Bill of Sale is associated with the transfer of any personal property to a person through a security for payment of money.
In this case, the transfer of ownership is completed when certain conditions are met.
How do I make a Bill of Sale?
You can create your own Bill of sale using several templates. Follow these easy steps now:
1. Include property details
Property details are very important for making legal documents. If you are selling your personal property, please provide the location, area and other necessary information.
However, in order to sell multiple products, you will need to specify a different type, model, ID number (if any), or details of the item. This helps to give a clear idea of the type of product or property.
2. Gather information from both parties
Before taking help from the courts, you must submit full details of the buyer and seller. So, state the permanent addresses of both parties along with their current addresses (if available).
A bill of sale can contain information on more than one buyer or seller. To deal with a company, you need to collect an incorporated name, not a business name.
3. Set the price
To draft a document, details are very important, and to fulfill that purpose, you need to provide an exact price of the property or item. It is necessary to combine the tax amount with the total cost and record all the details to create a payment form. A buyer primarily makes payments via draft requests, cash, internet banking, or promissory notes.
A demand draft is the most secure method of transferring funds, and a promissory note is a legal document in which the buyer ensures that the seller completes payments on a loan basis.
4. Mention the existence of a loan
Having a loan on your property is one of the important things to discuss before making any transaction. So, note down the correct details about the name of the lender, the current amount, and the interest rate or other monetary terms. In most cases, the buyer does not buy such a property because it is a huge responsibility to pay off all debts.
5. Be crystal clear
If you have other issues that are not mentioned, you must mention them to avoid further conflicts with the law and the buyer at a later date. You must be transparent and use easily accessible language so that everyone can understand the facts.
6. Sign the papers
The last and most important thing is to sign the document. Set a reasonable date for both parties to present and sign the document. There is an option called “not sure”, and by selecting it in the questionnaire, you can select a suitable date for printing the document. A witness is mostly not required to produce a Bill of sale, but having one always validates any dispute.
Bill of Sale Vs. Invoice (Faktur)
A bill of sale is a legal document that informs the transaction of money in exchange for personal property or selling goods. However, an invoice is a document issued by the seller to the buyer to inform them of the total payment that is not yet due.
On some occasions, Bill of Sale and Invoice work together where an invoice or invoice is created prior to the transaction, and after that, a Bill of Sale is issued to keep evidence of the purchase history.