Bill of Sale

 

What is this document?

A Bill of Sale is a legal document that records that the seller sold specific property on a specific date to the buyer. It is proof that the property was transferred from the seller to the buyer.

 

When would I use this document?

This document is used with an Asset Purchase Agreement to prove that the seller has transferred the assets described in the Bill of Sale, and to prove that the seller has received payment for the assets.

 

Who signs this document?

Authorized representatives of the buyer and the seller sign this document.

 

More details about this document

In general, Bills of Sale are used to prove that an item has been sold by the seller to the buyer, and are most useful in private cash transactions. Buyers should keep the Bill of Sale to be able to prove that they have a right to the item, and that they have the right to sell the item to another person. The Bill of Sale is also a receipt for the purchase price, and gives the buyer proof that the seller has been paid. A Bill of Sale is required in most jurisdictions for the registration of the transfer of ownership in motor vehicles.

A Bill of Sale can be quite simple, setting out the buyer and seller information, a description of the item(s) sold, the date of the sale, the price (including taxes), a transfer of ownership, and a description of any liens.

The Bill of Sale used with an Asset Purchase Agreement is an unconditional agreement to transfer the ownership in the listed assets and an acknowledgement of receipt of the payment. It states that the seller has the right to transfer the assets and that the buyer shall have the right to the assets without any claim from the seller, and functions as a type of release of the seller’s claims against the assets.

 

What are the core elements of this document?

The core elements include Buyer, Seller, Price, Property, Transfer of Ownership, Date, Place, Release.

 

Related Documents

Asset Purchase Agreement – an agreement for the sale of the assets of a business.

Receipt of Payment and Release of Obligations – once final payment has been made for the item sold the seller can sign this document acknowledging full payment and releasing the purchaser from claims by the seller.

Promissory Note – a written promise to pay used to provide security for payment.

 

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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