If you are buying goods (or assets) from a seller (sometimes called a vendor), it is a good idea to request from the seller a document called a “bill of sale”. The bill of sale is intended to protect the purchaser. The main purpose of the bill of sale is to provide a legal document that is essentially a “receipt” for the purchaser to prove that the purchaser has purchased the goods from the seller.
A bill of sale can be used for the purchase of any type of goods including automobile, boat, equipment, furniture, bicycle, paintings, or even intangible items such as a customer list or a website.
A typical bill of sale will contain various provisions depending on the complexity of the purchase. In general, a bill of sale will contain at a minimum the following information:
1. A list of the goods being sold including as much identifying information as possible including a description and where possible a serial number
2. A statement that explicitly states that the goods are being sold to the purchaser
3. A statement that the seller is the legal owner of the goods
4. A statement that the goods are free of any liens or debts against the goods
It is important that the seller sign and date the bill of sale. If you want, you may also want to have someone other than the purchaser sign as a witness.
Sometimes the bill of sale may contain other provisions such as a warranty regarding certain representations made by the seller. For example, if you are buying equipment, the bill of sale may include a representation that the goods are in good working order. Depending on the circumstances, it will be useful to include a representation stating that goods are fit to be used for a specific use.
The bill of sale is not a guarantee that the seller actually owns the goods. If it turns out that someone else actually owns the goods, the true owner will be able regain possession of the goods. However, in such a situation, the purchaser will likely be able to initiate a lawsuit against the seller for breach of the representation that the seller is the legal owner of the goods.
The use of various legal forms are useful for transactions and can be found online. Sample Bill of Sale documents can be found online. Please note that the information in this article is for discussion purposes only and not intended to be free legal advice. It is by no means legal advice or even a statement of the law on this subject. Please do not rely on the accuracy or completeness of this information. Any question or concern elicited by the information on this page should be taken to a lawyer who will consider the facts of each case and the legal remedies available.