A Bill of Sale is Binding, Your Word Isn’t!
If you are selling your used car, gun, or boat, you want to ensure that the buyer doesn’t come back with a lawsuit or something worse, complaining that you lied about some of the features of the car. Also, you don’t want to pay for parking tickets when the car is abandoned after a sale. What you need is peace of mind after a sale. The peace only comes from the use of a bill of sale.
A bill of sale, also called a BOS, represents a legal instrument/ document that records transfer of the ownership rights to named asset from the seller to a buyer, in exchange for money. You can use a BOS to record the sale of watercraft, autos, aircraft, motorcycles, and even personal property like electronics, furniture or animals.
Unless otherwise stated, a BOS is drafted by the seller, and it has all the essential details of the transaction.
You need the BOS for your protection (and the buyer’s), should any disagreements arise in the future.
Still uncertain about why a Bill of Sale is essential?
1. It offers legal protection
Once signed, a BOS offers a high level of protection to both the seller and the buyer. It is a written and an irrefutable proof that the transaction took place. If anything happens to the car and the buyer failed to indicate it in the BOS, then they will be liable. And, as mentioned above, the BOS protects you from parking or speeding tickets after the sale of the vehicle.
2. It’s necessary for easy registration
Unlike the receipt from the supermarket, a BOS is a detailed document with the specifications of the vehicle required for registration – the odometer reading, vehicle identification number, model, make, year, and color, among others. These details are crucial for the registration of the vehicle or any other asset.
3. It’s a legal requirement
You might not think much into it, but a BOS makes financial, practical, and legal sense. Most states have laid out strict requirements on the requirements that must be present in a BOS. For example, you will need the BOS for the title transfer, a step that is necessary for the transfer of rights to ownership from the seller to the buyer.
4. It helps in making smart purchase decisions
The BOS, for example, one for a car, will come with details like the vehicle’s history report. Looking at the history, you can determine whether you should make the purchase or not. This is why you should always ask for a history report before you sign the BOS.
The Essential Elements of a Bill of Sale
The date of purchase
Name and address of the buyer and seller
Amount paid for the asset/ the transfer of the ownership rights
A detailed description of the asset being transferred
Guarantee that item on sale is free of liens, offsets, and claims
Warranties or representations
The signatures of the buyer, seller, and the acknowledgment of the notary public.