How To Write a Bill of Sale

What Is a Bill of Sale?

A bill of sale is a document that records the sale of an item between one party and another. It serves as a receipt, proving that a transaction has taken place and providing details like:

• Description of the item sold

• Date of the sale

• Purchase price

• Names of the buyer and seller

The purpose is to provide legal proof of purchase showing the transfer of ownership from the seller to the buyer, protecting both the buyer and the seller. This comes in handy if there’s a dispute about who owns the item in the future.

A general bill of sale is very basic and can typically be used to cover the sale of any item. There are different types of bills of sale you can use for different kinds of personal property and situations:

• Motor Vehicle: As the name implies, a vehicle bill of sale is used to sell a car, truck, motorcycle, or any other type of vehicle and includes specific details like the year, make, model, and vehicle identification number (VIN).

• Boat: This is used for title transfer of a boat to the new owner and includes the boat type or model and HULL identification number (HIN).

• Business: Used when someone buys or sells a business and includes the business name, type of business or business activities, and the assets included in the sale.

A bill of sale can work in different ways. It’s considered absolute if it’s for an item that’s sold without any strings attached and is completely owned by the buyer once it’s purchased. A bill of sale is conditional if there are conditions that must be met before the sale is final (like paying off a car before acquiring ownership). A bill of sale with a warranty means the seller promises the item is exactly as described and will work as promised. Sometimes, a bill of sale will include an “as is” clause meaning the buyer accepts the item in its current state without any promises from the seller regarding quality or condition, and the seller is not responsible for repairs or refunds.

What Should You Include in a Bill of Sale?

Make sure you write a complete bill of sale by including important details that show the buyer and seller understood the transaction:

• Date of the Transaction. Note the date of the sale to establish when ownership of the item changes from the seller to the buyer.

• Party Names and Contact Information. Provide the full names and contact information of the buyer and seller, such as addresses, phone numbers, and emails, to identify the individuals involved in the sale. You can verify the parties are who they say they are by checking their driver’s licenses or another form of identification.

• Description of the Item. Accurately describe what’s being sold and include specific details about make, model, color, size, body type, or any distinctive features.

• Sale Price and Payment Terms. State the amount of money being paid to purchase the item, the method of payment, like whether it’s cash, check, credit card, or some other way, and if it’s a one-time payment or there’s a specific payment plan.

• Any Warranties or "As-Is" Clauses. Explain whether the seller is making any promises or warranties about the item’s condition or if it’s being sold "as-is," meaning the buyer accepts it in its current state without any promises from the seller.

• Signatures. The buyer and the seller should sign the bill of sale to show they both agree to the terms and it’s an official document proving the transaction.

Write Your Bill of Sale Using Our Free Template

To create a bill of sale, you should start by gathering all of the information you need to include. Decide whether you want to write a general bill of sale or if there’s a specific type that fits your situation. There are also some legal considerations to keep in mind. Remember that there may be different state and local rules for bills of sale, especially for boat or vehicle sales. For example, the Department of Motor Vehicles (DMV) might require the buyer and/or seller to sign in front of a notary public for new vehicle registration. Check your state laws to ensure you include everything needed and confirm your document complies with their requirements.

Typically, you should structure your bill of sale by starting with a title, like "Bill of Sale," followed by sections for each part you want to include. At the end, leave spaces for the buyer and seller to sign. Use clear and simple language so the terms are easy to understand.

Use the Following Bill of Sale Form as a Guide:

After Making a Bill of Sale

Once you finish your bill of sale, review it for any errors and make sure the terms are clear and meet any legal requirements, including whether notarization is necessary. After it’s signed and the transaction is complete, both the buyer and the seller should keep a copy of the bill of sale for their records. Bill of sale documents serve as proof of ownership of an item for the buyer and can be useful later to register the item, sell it, or handle disputes about the purchase. For the seller, it’s proof that they no longer own the item.

You can find more information about business laws by checking out FindLaw’s Small Business Resources. If you’re still unsure about creating your own bill of sale or have additional questions, talk to a business lawyer who can help.

Disclaimer: The information presented here does not constitute legal advice or representation. It is general and educational in nature, may not reflect all recent legal developments, and may not apply to your unique facts and circumstances. Consider consulting with a qualified business attorney if you have legal questions.