Bill of Sale: Definition, When To Use, How To Write
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What Is a Bill of Sale?
A bill of sale, proof of purchase, proof of payment, As Is Bill of Sale, Proof of Sale, Sales Slip, or Sales Receipt, is a document or receipt used to transfer the ownership of an object such as a vehicle. This document becomes important when you need to buy or sell personal property. You may associate bills of sale with used vehicles, but you can use this document for a variety of items.
A bill of sale will detail a transfer of property or sale of items between a seller and buyer. This type of document serves as legal evidence that the seller transferred his or her rights to the assets described in the bill of sale.
A bill of sale must include key information such as the following:
- Names of the buyer and seller.
- Contact details.
- A description of the item(s) being sold.
- The price of the item(s).
- Methods of payment.
- Warranty details.
You'll typically see a bill of sale used to record the sale of automobiles, motorcycles, watercrafts, or other objects associated with transportation. You can also use a bill of sale to record the transfer of personal property, such as purchasing or selling a used car. A bill of sale is also useful for transfer of other personal property such as a bicycle, furniture, a laptop, or an animal such as a horse or other livestock.
This legal document records a transfer of ownership of an asset from one party to another. As a rule, the seller will draft the document. A bill of sale should include all details of the transaction as a way to protect both parties if a disagreement about the condition of the item or terms of the sale occurs. Since a bill of sale will include details about the condition of the item sold and any warranties, as well as terms of payment, this document acts as legal proof of the agreement.
When Should I Use a Bill of Sale?
You should use a bill of sale for the following circumstances:
- You own property you would like to sell and need to have a record of the purchase detail for accounting records. Examples of property include a motor vehicle (such as a car) or other personal property, but not real estate.
- You plan to purchase a motor vehicle or other property from a private seller, and you want to record the proof of purchase and the details of your agreement in writing.
- A proof of purchase is required. Many states will require a signed bill of sale in cases when you are transferring a title with a state's department of motor vehicles (DMV) or buying and selling branded livestock.
Some transactions involve an exchange of property but do not require a bill of sale, including the following:
- Real estate. You can't use a bill of sale to transfer real estate between owners because real estate transactions are more complicated than the types of transactions listed above. You will need additional forms from your state or local government, or a quit claim deed (a legal instrument used to transfer interest in real property) when you're dealing with a real estate transaction.
- Performance of services. A bill of sale transfers ownership, not services. If you're providing or obtaining a service such as business consulting or babysitting, you should instead use a general contract for these services. If you own a business that receives payment for selling products, a general receipt is sufficient.
- Small-scale sales. Although deciding whether you want a bill of sale for inexpensive property is a matter of personal preference, many people don't feel that creating a bill of sale for less expensive items is necessary. A bill of sale is not required for small-scale sales.
If you're not certain whether you need a bill of sale, you should consult an attorney . An attorney can help ensure you're using the correct document and are including all information that you need for your transaction.
Transferring Ownership of a Vehicle With a Bill of Sale
You must understand the intricacies of the bill of sale with motor vehicles if you plan to buy or sell an automobile. An automobile bill of sale represents that the right to ownership of the vehicle has been transferred. However, the vehicle's certificate of title represents the actual ownership. Every state requires this certificate of title, a document that records official proof of ownership of a vehicle.
If you are the purchaser of a vehicle, you can apply for a title in your name at your state's DMV when you have the signed bill of sale and pay a title transfer fee. In some states, the DMV requires a bill of sale signed by both the seller and the buyer. Some states require a notarized bill of sale as well.
Sale Contract vs. Bill of Sale
Make sure you understand the differences between a sale contract and a bill of sale when deciding which document you need.
A sale contract:
- Is executed between a buyer and seller.
- Details the terms for a buyer to agree to purchase an item and a seller to agree to sell it.
- Records the future sale of an item. A sale contract is used before an exchange of an item occurs.
A bill of sale:
- Transfers ownership.
- Provides details of the exact item a buyer will receive.
- Promises that the person selling the items has a valid title to the item as well as the right to transfer the title.
- May include warranties about the item sold and its future performance, or show that the item was sold "as is" and disclaim all warranties.
- Used during or after a product exchange.
Bill of Sale Templates
How Can I Write a Bill of Sale?
Some county tax assessor-collector's offices or local DMVs provide bill of sale forms that you can use. Some sellers also choose to create their own bill of sale. Since requirements vary by state, check your state's requirements to make certain your document complies with them. In some states, only the buyer needs to sign the bill of sale. Other states will require both the seller and buyer to sign. Requirements for notarization also vary among states.
Include the following essential pieces of information:
Basic data
- Name and address of the seller.
- Name and address of the buyer.
- Date of transaction.
- Previous owner(s) (in other words, if someone first sold the item to the seller, this fact should be included).
Description of the item
- Identification number.
- Serial number.
- Make.
- Model.
- Design.
- Size.
- Color.
- Any special marks or features.
- Any faults of the item.
- Special conditions to the sale (for example, if the item is sold as is or with warranty).
Additional information needed for vehicle sales
- VIN, or vehicle identification number.
- License plate number.
Payment information
- Amount paid (write out in words and in numbers).
-
Method of payment.
- Did the buyer pay in installments or in full?
- Did the buyer pay with cash, credit card, bank deposit, or check?
-
Agreements (if applicable) concerning
- Deadlines for pending payments.
- Terms for late payments.
- Interest rates.
Before completing the transaction, make sure the bill of sale is completely legible and verify that all information and signatures are accurate. Finally, make copies of the document for both the buyer and the seller.
Protect yourself as either a buyer or seller with a carefully constructed bill of sale the next time you enter into a legal transaction.
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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
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Meet some of our Bill of Sale Lawyers
Anand A.
Anand is an entrepreneur and attorney with a wide-ranging background. In his legal capacity, Anand has represented parties in (i) commercial finance, (ii) corporate, and (iii) real estate matters throughout the country, including New Jersey, Pennsylvania, Delaware, Arizona, and Georgia. He is well-versed in business formation and management, reviewing and negotiating contracts, advising clients on financing strategy, and various other arenas in which individuals and businesses commonly find themselves. As an entrepreneur, Anand is involved in the hospitality industry and commercial real estate. His approach to the legal practice is to treat clients fairly and provide the highest quality representation possible. Anand received his law degree from Rutgers University School of Law in 2013 and his Bachelor of Business Administration from Pace University, Lubin School of Business in 2007.
"Anand was a pleasure to work with! He was very thorough and professional."
Amber M.
Amber Masters has 11 years of experience as a contracts attorney, helping small businesses with an array of agreements, such as purchase agreements, master service agreements, and employment contracts. She has an extensive background assisting health care providers through practice transitions including dentists, doctors, and other health care professionals. She is a highly rated and acclaimed estate planning attorney and personal finance expert, who has been featured on CNBC, NBC, and Yahoo Finance. She successfully launched and sold a fintech startup and can empathize with the issues small and mid-size businesses face. Licensed in Oklahoma and Arizona.
"Amber was great to work with. Clear scope delivery on schedule and budget. Very helpful and efficient. Would highly recommend her."
Sara S.
With over eleven years of intellectual property experience, I’m happy to work on your contract problem. I am very diligent and enjoy meeting tight deadlines. Drafting memoranda, business transactional documents, termination notices, demand letters, licenses and letter agreements are all in my wheelhouse! Working in a variety of fields, from construction to pharmaceutical, I enjoy resolving any disputes that come across my desk. I will prioritize your project, big or small. Please be ready and prepared with all relevant documentation so we can get started as soon as you click HIRE! Hourly rate projects will be billed hourly in accordance with the timesheet. Flat rate projects will be billed in segments. Choosing an hourly or flat rate is up to you. Absolutely no refunds.
"Sara was responsive and knowledgeable about prenup specifics. Thank you so much!"
Jason H.
Jason has been providing legal insight and business expertise since 2001. He is admitted to both the Virginia Bar and the Texas State Bar, and also proud of his membership to the Fellowship of Ministers and Churches. Having served many people, companies and organizations with legal and business needs, his peers and clients know him to be a high-performing and skilled attorney who genuinely cares about his clients. In addition to being a trusted legal advisor, he is a keen business advisor for executive leadership and senior leadership teams on corporate legal and regulatory matters. His personal mission is to take a genuine interest in his clients, and serve as a primary resource to them.
"Wonderful attorney! He was extremely professional, answered all of my questions and was patient with my complicated legal situation. Don’t hesitate to hire him."
Darryl S.
Darryl S.
I offer flat/fixed fees rather than hourly work to help lower your legal costs and align our interests. I specialize in contract law and focus on making sure your contract is clear, protects your interests and meets your needs. You can expect fast, straightforward communication from me, making sure you understand every step. With my experience, you'll get a detailed review of your contract at a fair, fixed price, without any surprises. I have over 30 years of business and legal experience that I bring to your project. I graduated from The University of Texas School of Law with High Honors in 1993 and practiced at Texas' largest law firm. I have founded companies and so understand how to be helpful as both a lawyer and business owner.
"Had a great experience working with Darryl. He was thoughtful, direct, responsive, and most importantly able to quickly understand a complex business and regulatory structure without overcomplicating things. Really appreciated his practical approach and ability to explain things clearly. Highly recommend."
Karl D. S.
Karl D. Shehu, has a multidisciplinary practice encompassing small business law, estate and legacy planning, real estate law, and litigation. Attorney Shehu has assisted families, physicians, professionals, and people of faith provide for their loved ones by crafting individualized estate and legacy plans. Protecting families and safeguarding families is his passion. Attorney Shehu routinely represents lenders, buyers, sellers, and businesses in real estate transactions, researching and resolving title defects, escrowing funds, and drafting lending documents. To date, Attorney Shehu has closed a real estate deal in every town in Connecticut. As a litigator, Attorney Shehu has proven willing to engage in contentious court battles to obtain results for his clients. While practicing at DLA Piper, LLP, in Boston, Attorney Shehu represented the world’s largest pharmaceutical companies in multidistrict litigations filed throughout the United States. He has been a passionate advocate for immigrants and the seriously injured, frequently advising against lowball settlement offers. He is willing to try every case to verdict, and he meticulously prepares every case for trial. Attorney Shehu began his legal career as a consumer lawyer, utilizing fee-shifting statutes to force unscrupulous businesses to pay the legal fees of aggrieved consumers. For example, in Access Therapies v. Mendoza, 1:13-cv-01317 (S.D. Ind. 2014), Attorney Shehu utilized unique interpretations of the Trafficking Victims Protection Act, Truth-in-Lending Act, and Racketeer Influenced and Corrupt Organizations Act (RICO) to obtain a favorable result for his immigrant client. Attorney Shehu is a Waterbury, Connecticut native. He attended Our Lady of Mount Carmel grammar school, The Loomis Chaffee School, and Chase Collegiate School before earning degrees from Boston College, the University of Oxford’s Said Business School in England, and Pepperdine University School of Law. At Oxford, Karl was voted president of his class. Outside of his law practice, Attorney Shehu has worked to improve the world around him by participating in numerous charitable endeavors. He is a former candidate for the Connecticut Senate and a parishioner of St. Patrick Parish and Oratory in Waterbury. In addition, Attorney Shehu has written extensively on the Twenty-fifth Amendment and law firm retention by multinational firms.
November 3, 2022
Myron M.
For over 20 years Myron E. Mims Esq. has provided legal and consulting services to small and medium sized businesses. Mims served as regional counsel for a real estate investment and development firm where he managed the Company’s contract execution and management, and dispute resolution affairs. Mims was responsible for oversight and risk management of all legal affairs, including management of a robust litigation docket consisting of a seven figure, multi-party construction lawsuit, and multiple vendor and tenant disputes. Mims prepared new contract docs and implemented execution and management processes that lead to the reduction of litigation. As a managing partner of Nixon Mims, LLP Mims provided legal and consulting services to clients of that consisted of real estate, construction, telecommunications, media and food industry businesses. Mims routinely assisted clients with developing corporate governance and management protocols, strategic planning initiatives, and advised clients in the negotiation and execution of complex business transactions. Mims routinely provided operational oversight and technical analysis for management. During this period Mims obtained firsthand experience of the access to capital impediments and challenges that growth-stage businesses face.
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Review real estate contract for a parking space purchase and represent at closing.
"Very knowledgeable, helpful and responsive, does comprehensive work on short notice. I would recommend and work with again."
Release of liability for sale of used equipment in california
"Very responsive and provided excellent work product."
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Arts
Bill of Sale
Connecticut
How do I use a bill of sale?
I am looking to buy and would not want to be subject to scam. Bill of Sale with regards to collectible trading cards. I am looking to buy a collection of Magic: The Gathering cards and I am wondering the course of action using a Bill of Sale. I want to ensure the other peer is not listing a falsely advertised collection and that the cards are not counterfeit and in the case they are not as advertised or not real, what protections do I have as the buyer?
Jane C.
You need an attorney to draft a contract of sale.
Contracts
Bill of Sale
Illinois
Is a bill of sale necessary for a private vehicle sale?
I recently sold my car privately and did not use a bill of sale, as both parties agreed on the terms verbally and exchanged payment. However, I am now concerned about potential legal issues that may arise from not having a written agreement. I would like to know if a bill of sale is necessary for a private vehicle sale to protect both the buyer and seller.
Randy M.
A bill of sale is not legally required in every state for a private vehicle sale, but skipping it can lead to unnecessary problems. Whether your state mandates it or not, having a signed bill of sale is one of the simplest ways to protect yourself during and after the sale. It provides written proof of the transaction, including the sale date, purchase price, vehicle identification details, and whether the vehicle was sold “as-is.” If the buyer fails to transfer the title right away or incurs tickets or tolls before doing so, you could still be on the hook unless you have clear documentation showing you sold the car and on what date. While a verbal agreement can be legally enforceable, it’s not enough to protect you if a dispute arises. Let’s say the buyer later claims the car wasn’t in the condition you described, or you’re contacted by law enforcement or a toll agency asking why your plates are still connected to unpaid charges. Without a bill of sale or other written record, it becomes your word against theirs. In contrast, a simple, signed document can resolve that question instantly. That’s why states like New York, Vermont, Montana, and a handful of others require a bill of sale as part of the title transfer process. In states where it’s not legally required, such as California or Texas, the DMV still recommends using one for your own protection. In your situation, where the sale has already taken place, it’s not too late to create a retroactive bill of sale and ask the buyer to sign it. Include the basic facts: date of sale, buyer and seller names and addresses, VIN, odometer reading, sale price, and a short acknowledgment that the car was sold “as-is” without warranties. Most buyers won’t object to signing something that protects them as well. You should also file a release of liability or notice of transfer with your state’s DMV if you haven’t already. This document tells the DMV that you're no longer the owner and helps protect you from liability if the buyer fails to register the car right away. For future transactions, always use a bill of sale, even for low-value vehicles or sales to friends and family. You can find attorney-drafted versions through legal platforms like Contracts Counsel. The time it takes to fill it out is minimal compared to the potential headaches of dealing with a DMV problem or legal dispute down the line. Make sure the buyer transfers the title quickly. Until they do, you might keep getting their tickets and toll bills in the mail, and you'll have to deal with the headache of proving you no longer own the car if any legal issues come up. You may also want to keep a copy of any communications you had with the buyer confirming the sale, such as emails, texts, or a receipt of payment. These won’t replace a formal bill of sale, but they could help support your position if needed. If you encounter resistance from the buyer or complications with the DMV, that’s a good time to speak with an attorney in your state who handles vehicle sales, consumer protection, or civil liability. The attorneys here on Contracts Counsel would be happy to assist you.
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Doc Type: Bill of Sale
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