5 Situations That Require A Proper Bill Of Sale

5 Situations

A bill of sale is a document many of us have never used before but is very important. This document is used by buyers and sellers for the ownership transfer of a property. The reason why it is not always required is because not all properties require a Bill of sale.

What Is A Bill Of Sale?

A Bill of Sale is a legal document between a buyer and a seller that documents the transfer of ownership of an item of value from one party to the other in exchange for cash.

The document serves as evidence that money has actually been exchanged for the item, and it prevents future conflict. Suffice to say that the bill is a receipt of trade issued by the seller to the buyer

This piece of document is legally binding once both parties involved in the sale append their signature, and the item could be anything ranging from a vehicle to an appliance; as long as it has value and money was exchanged for it, it is legally viewed as a contract.

5 Situations That Require A Bill Of Sale

There are certain situations that require a Bill of Sale. Below, we review five of them.

Property Sale

If you own a property you plan to sell and would like to keep a record for accounting purposes; you definitely need a Bill of Sale. The property could be anything ranging from a truck to a lawn mower. But note that Bills of Sales are not used for real estate. For that, the Title Deed will suffice.

Car Purchase

If you want to buy a car from a dealer, you don’t need a Bill of Sale for that; however, if you are buying it from a private owner and you want to have a proof that you didn’t steal but paid for it, you can demand a Bill of Sale. The document can be prepared by you or the seller, and it should contain important details like the names of the parties involved, the car brand and model, among other details.

Should a dispute arise in future or the authorities demand proof that the car is yours, you can present the Bill of Sale showing the date the sale was made.

Law Requirements

In some states, the law requires that certain items require a Bill of Sale when transferring ownership from one party to the other. This is especially true for vehicles of all kinds. So if the local laws in your state require a Bill of Sale, you have no option but to get one.


Another reason why you may need a Bill of Sale is if you want a guarantee from a seller who has the title for the item in question. In some cases, the seller may have a valid Title Deed but not the right to transfer ownership if the title is shared with another owner.

To protect yourself from potential lawsuits, you may request a title deed, and in it, the seller will affirm that he has the legal right to transfer ownership to you in exchange for cash. The guarantee is a piece of evidence you can present before law courts to show that you didn’t steal the item and that you paid the price for it under the understanding that the seller has a right to sell it to you.


You definitely need a Bill of Sale if the property is not brand new, and the seller has assured you that it is working fine and will continue to do so for the foreseeable future. This can also reverse if a seller is forfeiting all claim warranties. The warranty issue depends on the conditions and agreements agreed upon by both parties. Yet again, the bill protects both parties from future liabilities or breach of contract.

Benefits Of A Bill Of Sale

A Bill of Sale offers both parties certain benefits, such as:

Easy Registration

With a bill of sale, the buyer can easily register it in his own name. In some states, to register a second-hand vehicle, you need to provide a bill of sale which contains information like the car brand, model, year of manufacture, and the Vehicle Identify Number. All these details are contained in a bill of sale.

Smart Purchases

This document helps you make smarter purchase decisions because you get to see the historical report of the property. With this information, you can tell whether it is worth the price the seller is asking for.

Protect Yourself

You also protect yourself from disputes with the other party in the future or potential litigation by a third party. A bill of sale can be legal protection that will absolve you of any claims or counterclaims.

If you must sell or buy any item from someone, enquire whether the law demands an exchange of a Bill of Sale and or the other party insists on having one.


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