Last Updated October 15, 2024
What is a Bill of Sale?
A Bill of Sale is a legal document that details the transfer of ownership of an item between a seller and purchaser. It includes the date and location of the transaction, as well as the amount of money offered in exchange for the goods being sold.
Rules and regulations regarding private sales differ between states and territories. LawDepot's Bill of Sale can be used in the Australian Capital Territory, New South Wales, Northern Territory, Queensland, South Australia, Tasmania, Victoria, and Western Australia.
A Bill of Sale typically involves two parties: a seller and a purchaser.
The seller is the individual or company selling the goods.
The purchaser (also known as a buyer) is the individual or company giving money in exchange for the goods.
A Bill of Sale is also known as a:
- Sales Receipt
- Proof of Purchase
When should you use a Bill of Sale?
A Bill of Sale serves as a private sales receipt where payment is made in full as soon as goods are transferred from a seller to a buyer.
In a Bill of Sale, goods are accepted "as is," which means the purchaser accepts the goods in their current condition, despite any features that may not function properly. The seller is not liable for any issues with the item, because the onus is on the buyer to ensure they're getting property in the condition they want.
If there is something wrong with the property that is discovered after the sale, it's generally considered the buyer's responsibility.
What can you use a Bill of Sale for?
A Bill of Sale is meant for simple, straight-forward sales on items such as automotives, equipment, animals, or other personal property. It is not appropriate to use for transactions involving real estate, services, or shares.
For example, a Bill of Sale can be used to transfer ownership of goods such as:
- Appliances
- Cars
- Boats
- Equipment
- Furniture
- Livestock
- Personal Items
- Pets
A Bill of Sale typically includes:
- The full names and contact information of the buyer and seller
- A statement that transfers ownership of the item from the seller to the buyer
- A complete description of the item being purchased
- A clause indicating the item is sold "as-is"
- The item's price (including sales tax)
- The form of payment
When writing an item description, it's important to include all identifying features, such as the make, model, colour, and any identification numbers (serial numbers, odometer readings, etc.) or other notable markings.
Do not use nicknames or trading names when recording the names of the seller and purchaser. Use the full legal name of an individual, or the official name of a company.
In some jurisdictions, both the seller and the purchaser are required to sign the document. However, in most cases, the purchaser does not need to sign. You can check what's required in your jurisdiction, or have the purchaser sign to ensure the contract is valid in any case.
Why is a Bill of Sale important?
A Bill of Sale is used as evidence to prove an item was sold from one person to another. In the case of a dispute, the document can protect both the seller and the purchaser: the seller can prove the item was sold "as is," and the purchaser can prove payment was made in full.
In addition, a Bill of Sale is useful when proving who is the legal owner of an item. For instance, if a car is sold without a Bill of Sale, the seller may be held liable for any fines or violations associated with the car. In some states, a purchaser might not be able to register the car without a Bill of Sale.
A Bill of Sale may also be used as evidence for tax or insurance purposes.
