Bill of Sale FAQ - United States

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A Bill of Sale is a document that transfers ownership of an asset (or assets) from a seller to a buyer. While the purchase and sale of used vehicles is arguably the most common use of Bills of Sale, they can be used for any items of value.

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Contents

General

What is a bank draft?

A bank draft is a check written by one bank on its account with another bank. It is an extremely secure method of transferring funds.

What is a Certified Check?

It is a check for which payment is guaranteed by the bank. A certified check shows that there are sufficient funds in the account to meet the amount for which the check was drawn. A certified check is less secure than a bank draft but more secure than a normal personal check.

What does consideration mean?

The consideration is the value that the Purchaser transfers to the Seller in exchange for the goods being sold to the Purchaser. In most sales transactions, the consideration takes the form of money. A contract for transfer of goods or property may not be valid if no consideration is given. If you wish to transfer property for no consideration then you should consider using a quitclaim deed instead of a bill of sale or sales agreement.

What is the location of the property?

The location of the property is the jurisdiction where the property is situated at the time of the sale.

What is a notary public?

A Notary Public is a state-appointed official who is authorized to authenticate certain legal documents, such as declarations, affidavits, acknowledgments, deeds, mortgages, and other contracts. Most Attornies are a Notary Public for their local jurisdiction.

What is the Price?

The Price is the total monetary value that the parties have agreed the goods being sold are worth. Although assessed in terms of money, the Price does not need to be paid to the Seller in cash. Other forms of payment are also available.

What is a Promissory Note?

It is a legal document evidencing that the borrower will repay a loan to the lender under the terms agreed upon in the contract. A Promissory Note may also be referred to as an "I.O.U." or a Loan Note.

What is the sales tax on my sale?

The amount of sales tax varies from jurisdiction to jurisdiction, and may also vary depending on the type of item being sold. If you have any uncertainties, you should check your local laws to determine the amount of sales tax that applies to your transaction.

When should I deliver the Bill of Sale to the Purchaser?

You should not deliver the Bill of Sale to the Purchaser until you have received full payment of the purchase price from the Purchaser. Full payment would include the provision of a promissory note for the outstanding balance owed.

I am selling goods to the Purchaser. Should I use the Sales Agreement or the Bill of Sale?

Both of these contracts can be used to sell goods to a Purchaser. However, the Sales Agreement is more extensive than the Bill of Sale and should be used when you want a more detailed sale contract or when full payment will be made after providing possession of the goods. The Bill of Sale can be used when a simple contract evidencing a sale is sufficient.

Motor Vehicle

What is the Odometer Reading?

The Odometer Reading is the instrument display on the vehicle's dashboard that shows the total number of miles or kilometers that the car has traveled.

What is the Vehicle Identification Number (VIN)?

The VIN is a number that is assigned to every vehicle and can contain both letters and numbers. VINs are used in New Zealand, Australia, Europe, the United States, Canada and other countries. Vehicles that have been manufactured since 1980 will contain a VIN number that is 17 characters long. The VIN can be used to determine information about a vehicle, such as the: country and year of production, manufacturer, style, make, model, engine type, etc. It is usually located in the door frame of the front doors, on the engine, around the steering wheel, or on the dash near the window. No two vehicles in the world have the same VIN number, so the VIN number clearly distinguishes one vehicle from all other vehicles.

What does “in excess of the odometer's mechanical limits” mean?

This phrase means that the odometer has reached its maximum number and has now restarted counting the mileage from zero. For example, if the odometer only contains 6 digits, then the mechanical limit would be 999,999, after which the odometer would begin counting at 000,000. This piece of information is important to prospective Purchasers because if the odometer has exceeded its mechanical limit, then the odometer reading does not reflect the true number of miles/kilometers that the car has traveled.

If I sell the goods “as-is without any warranties”, what are my liabilities to the Purchaser?

The term “as-is without any warranties” means that the Seller is not guaranteeing the quality of the product to the Purchaser. The Seller is not liable for any imperfections or flaws in the goods provided the Seller has not taken steps to hide those flaws or lies about the existence of those flaws.

Equipment

What are serial numbers?

Most equipment is assigned a serial number which can be used to identify a specific piece of equipment from all other pieces of equipment. The description of the equipment being sold in a Bill of Sale should contain the serial number, if the equipment has a serial number.

If I sell the goods “as-is without any warranties”, what are my liabilities to the Purchaser?

The term “as-is without any warranties” means that the Seller is not guaranteeing the quality of the product to the Purchaser. The Seller is not liable for any imperfections or flaws in the goods provided the Seller has not taken steps to hide those flaws or lies about the existence of those flaws.

Water Craft/Boat

What is the Hull Identification Number (HIN)?

The HIN is a 12 digit alpha-numeric number that all boats manufactured after 1972 are equipped with on their transom (the flat rear end of the boat). No two boats have the same Hull Identification Number, so this number can be used to easily identify a specific boat.

If I sell the goods “as-is without any warranties”, what are my liabilities to the Purchaser?

The term “as-is without any warranties” means that the Seller is not guaranteeing the quality of the product to the Purchaser. The Seller is not liable for any imperfections or flaws in the goods provided the Seller has not taken steps to hide those flaws or lies about the existence of those flaws.

Can I include a feature in the Bill of Sale if the water craft possesses it but that feature no longer functions properly?

Yes, you can list it as an included feature, but should create an additional clause in the Bill of Sale which details the current working condition of the feature. Any items listed as features of the boat which are not expressly described as being non-functioning will be assumed to be in working order. If you list a feature but fail to state that it is non-functioning, you may face liability for that omission.

Aircraft

What is the registration number?

Aircrafts over a certain weight are required to be registered with a national aviation authority. This number is assigned to each aircraft by the Federal Aviation Administration when the aircraft owner registers the aircraft. The registration number enables the aircraft regulatory body to keep track of all aircraft that are registered for private use.

What is a serial number?

Every aircraft is assigned a serial number by the manufacturer before it leaves the production plant. The serial number ensures that at all times, every aircraft in use has its own distinctive identification number.

Animal/Horse

What information should be included in the detailed description section?

The Seller should include such information as the species of animal and a brief physical description. Other information that may be included would be: height, weight, age, gender, color, medical conditions, known ancestry, etc.

Furniture

What information should be included in the detailed description section?

You should include a description of what type of furniture is being sold (e.g. couch, love seat, china cabinet, etc.), as well as a brief description of the appearance and condition of the item. Other information that may also be included would be the: color, dimensions, shape, age, repairs, missing components, manufacturer's information, etc.

What is a serial number?

Some pieces of furniture are assigned a serial number by the manufacturer before they leave the production plant. The serial number ensures that the furniture has its own distinctive identification number, which may be used for insurance purposes, and enables the furniture to be identified if it is ever lost or stolen.

Personal Property

What information should be included in the detailed description section?

You should include a description of what type of personal property is being sold (e.g. wrist watch, sports memorabilia, electronics, etc.), as well as a brief description of the appearance and condition of the item. Other information that may also be included would be the: color, dimensions, shape, age, repairs, missing components, manufacturer's information, etc.

What is a serial number?

Some personal property is assigned a serial number by the manufacturer before it leaves the production plant. The serial number ensures that the personal property has its own distinctive identification number, which may be used for insurance purposes, and enables the personal property to be identified if it is ever lost or stolen.

Signing Details

I do not know when the Bill of Sale will be executed. Can I fill in the date later?

Yes, by selecting 'Unsure' as the date of execution, a blank line will be inserted into the contract so that you can add the correct date after printing the document.

Is the jurisdiction for signing the same as the location of the property?

They can be the same jurisdiction, but do not necessarily have to be. The jurisdiction for signing refers to the location where the Seller will sign the Bill of Sale.

Does the Purchaser need to sign the Bill of Sale?

Typically, the Purchaser does not need to sign the Bill of Sale. However, some jurisdictions will require the Purchaser to sign the Bill of Sale for some or all forms of transactions. You should check your local laws to verify whether the Purchaser's signature is required for your specific sale. If you are unsure as to your jurisdiction's requirements, then you should have the Purchaser sign the Bill of Sale to ensure the sale is valid.

Do I need to have the Bill of Sale witnessed by a third party?

Most jurisdictions do not require that a Bill of Sale contain witness signatures, but having one or two witnesses when the Bill of Sale is signed is better evidence that the parties entered into the Bill of Sale if the matter goes to litigation.