A bill of sale is defined as a document that states the transference of title held to an asset from the seller to the buyer. It is a “sales receipt” that contains vital information about the asset, and about each of the parties entering into the agreement. Many people forgo a legal bill of sale and either buy or sell merchandise without an agreement at all (think Ebay), or just scrawl out “Sold car to Bill for $400″on a scrap or napkin. Many people see this as fine. I’m going to tell you why it isn’t.
A bill of sale will provide you with a clear and precise way to document your property transfer. We’ll take a car as the property for example and use the “Sold car to Bill for $400” note as the proof. First off, this note doesn’t say how many miles the car has on it, what type and year the car is, what it’s VIN (Vehicle Identification Number) is, etc. Bill could later come back and claim that you sold him your new Hummer instead of the rusted out Bronco sitting in the backyard. However, with a proper bill of sale filled out at the time of the transaction, you could come back and match up identifying notations that would prove that you certainly did not sell him the Hummer.
This form also protects the buyer. It will let you know mileage and will give you recourse if the seller ever denies selling you the property, maybe even accusing you of theft. A Bill of Sale form is truly a safety net to the buying and selling of merchandise. It is a permanent record that you can use to protect yourself from any future trouble from the transaction. Most every state has made a bill of sale a standard form. It is required many times in the cases of cars that are too old to be titled. It is proof of ownership in those instances.
Most bill of sales are customizable, simple, and easy to find. I keep a few in my file cabinet at all times just in case I need one quickly to cover a purchase or sale. They will cover all the necessary legal terms and conditions that should be included in the bill of sale as well. No real legal terminology you need to know beforehand. It will spell out in writing the description of the merchandise, price, condition, method of purchase, any warranty, and the date of transaction. If disputed, the bill of sale will be signed by both parties and dated, so that you have a reference at all times. For even further protection, if you are unsure about the other party’s veracity, you can get the form notarized and witnessed at many places for a very small fee. However, most times the standard double-signature bill of sale is plenty.