A generic bill of sale is a contract that serves as an invoice for any form of private property that is traded or exchanged for cash.
If the new owner has to show ownership, they will need to use the form frequently—a bill of sale documents the transaction between two parties. The contract cannot be signed until the sale has been completed.
This bill serves as a receipt representing the whole deal between a buyer and a seller. It acts as evidence of ownership and holds all parties subject to the conditions agreed upon in the bill of sale. This document includes details about the buyer and seller, an overview of the item for sale, the date of sale, any other terms or guarantees, and signatures from the buyer, seller, and witnesses.
A bill of sale is also known by other names. They are:
- Proof of purchase
- Proof of payment
- As-is bill of sale
- Proof of sale
- Sales slip
- Sales receipt
Generic Bill of Sale- An Overview
The generic bill of sale can be used for the sale and purchase of the following items:
- Vehicles, boats, jet ski and planes
- Trailers, campers, and recreational vehicles
- Equipment, appliances, and exercise equipment
- Horses, cats, and dogs are examples of animals the form applies to.
- Bikes, clothes, and jewelry
- Electronic devices such as phones and speakers
- Weapons and ammunition
- Items of furniture
It is used by a person trying to buy or sell a product. This includes individuals:
- Using an online platform to conduct transactions or trades
- Purchasing or selling previously owned goods
- Buying or selling high-priced goods
- Privately purchasing or selling products
Crafting a Generic Bill of Sale
It is important to know what to include before and after creating a bill of sale. In this section, we have explained the steps to take when creating this document.
Before signing a generic bill of sale, gather some general details, such as the buyer’s and seller’s names and addresses, the price, and any important details for the property being sold. If you’re selling a car, you’ll need the make, model, year, body type, odometer, and vehicle ID number.
Answer key questions
The collected details will be used to create the bill of sale. The questions asked to to vary depending on the place and the responses you get. Answer questions like the size of the property, any damages to the property, etc., for transparency purposes.
Review and sign
Before signing your bill of sale, carefully check it to ensure that there are no errors and that it will suit your needs
A notary public is required by law to witness all parties signing the document. In the case of conflict, using a notary helps to validate the document. If you use a notary, wait until the notary is present before signing the document. If the parties are in different places, their signatures can be notarized separately. The bill of sale will be considered implemented and legal once signed and notarized.
A bill of sale functions similarly to a contract in that, if correctly written and executed, it can be legally binding to all signatories of the agreement. Therefore, it is critical that sellers and buyers carefully read the generic bill of sale form and ensure that all of the information is complete and accurate.
NOTE: Incorrect information, such as an inflated selling price or a falsification of the property being sold, can cause legal issues. Insufficient information can also pose issues, which is why a correctly written bill of sale should provide as much information about the item(s) being sold and the terms of the sale as possible.
It is important to understand that the seller should have the full legal power to sell the property specified on the bill of sale form, or the seller could face severe legal consequences. As a result, the buyer should request that the seller provide documents showing complete ownership rights to the item(s) being sold. If the seller cannot produce this paperwork upon request, the buyer should be reluctant to sign the generic bill of sale.
Distribute and store copies
Provide the involved parties with a copy of the completely implemented document. It’s also a brilliant idea to give a copy to any third parties involved. Keep a copy in a secure spot. As a backup, we suggest creating a digital copy.
Complete related documents
Creating a sale of goods agreement before delivery helps to protect the buyer and the seller. A sale of goods agreement may be used to document the main terms of a sale, such as party privileges, distribution information, and shipping conditions. This will help to ensure that both the buyer and seller fulfill their obligations in good faith. The agreement would demand that the buyer be compensated for any late shipment and quality issues with the products. The parties will sign the bill of sale after delivery to document the title transfer.
Components of a Generic Bill of Sale Form
A generic bill of sale has components just like any other document. We have briefly explained those components in this section.
Start by identifying the type of property being sold on the generic bill of sale. If you want to sell different kinds of land, you may need to use multiple bills of sale. Include as much identifying information about the property as possible when describing it.
Date of transaction
A seller usually creates a bill of sale to show that the item was sold and delivered on a specific date. After the contract, both the buyer and seller can keep copies of the signed generic bill of sale as evidence of sale and proof of payment.
This part includes the buyer’s contact details and details about any existing buyers. Contact information includes a physical address and a valid phone number.
This part includes the seller’s contact details and details about any existing buyers. Contact information includes a physical address and a valid phone number.
Description of the item
Indicate the characteristics of the property to be sold. This section has enough space to provide detailed information about the property at the time of sale. Remember that if the transaction includes more than one item, it might be important to list the items separately. It is advisable to provide information about its appearance and condition. For example, you can include details about the item’s color, size, shape, age, missing parts, and manufacturer details.
Include any valid identification numbers if the item is a piece of machinery or a car (such as a VIN, HIN, or serial number). A serial number gives the item a unique identification, which is often used for insurance purposes, allowing police to locate the property if it is ever stolen. Apart from that, in case of machinery or car sale, odometer reading at the time of sale must be provided in the “Odometer Disclosure statement” in the generic bill of sale.
Location of the sale
The location of the item being sold is stated in this section of the generic bill of sale. Usually, this only includes general location details such as city, state, county, zip code, etc.
This section specifies the amount the buyer will pay for the actual property. The financial details of the transaction should be specified in the generic bill of sale. When analyzing the form, it should show how much the property was sold for and when it was sold.
If there is a sales tax, it should be recorded. This part explains how sales tax affects the price. It is either included with the price or paid in addition to the price.
Include a clause specifying that the buyer has examined or has had the opportunity to evaluate the product prior to the sale.
The payment mode indicates the buyer’s preferred payment method—cash, personal check, certified check, money order, and other payment methods available. Cash, electronic transactions, and trades are common payment methods in a generic Bill of Sale. When using e-transfers, ensure the funds are deposited into your account before sending the item to the customer. A bank draft or verified check can also be used.
An encumbrance is a right to, stake in, or legal responsibility on property that does not prevent the property from being transferred but can reduce its value. A generic bill of sale contains a statement that the seller guarantees that the property being sold is free and clear of encumbrances.
Any loans or liens
A lien is a claim placed on properties that are usually used as leverage to repay a debt. Include a statement declaring that the property in question is free of any loans and liens.
History of ownership
A history of previous owners will indicate the value of a property. Perhaps there could be important people who owned the property being sold, making it more valuable.
“As is” means that the product will be delivered in its current form, and the buyer accepts it with all imperfections. This clause protects the seller from refunding for any item-related problems arising after the buyer has paid for and received the item.
Vehicle identification number (VIN)
A vehicle identification number is a vehicle’s serial number; Seventeen letters long, and correspond to the car’s manufacturing details, such as the specific design, the place where it was produced, and the year of manufacture.
This section of the sales bill is used to determine whether the item is being delivered as a gift to the buyer. If the gift box on a sales bill is reviewed, it will have specific tax implications for that calendar year.
When exchanging one item for another, the trade-in bill of sale verifies the present value of the item to ensure that each party receives fair value for the transaction.
This section is only applicable if there’ll be a witness available to sign the generic bill of sale. It contains the full name, address, and other contact details of the witness. A public notary or a party agreed on by the buyer and seller will serve as the witness.
In most cases, only the seller signs the Bill of Sale. Some states, however, require the buyer to sign for most or all forms of transfers. Check to see if the buyer’s signature is required by state or local law for your particular transaction. If you are unsure of the requirements in your country, the buyer can sign the generic bill of sale to ensure its authenticity.
Download Free Templates
Here are free and customized templates to download:
The generic bill of sale benefits both the buyer and the seller in different ways. For the seller, the bill of sale has evidence of the sale since it has the date of purchase. It also has an ‘as-is’ clause where the buyer agrees to purchase the property in its present state, protecting the seller from paying for damages. Lastly, the bill of sale facilitates ease of tax reporting.
For a buyer, the bill of sale proves that the property he/she is buying is the seller’s property. It also contains warranties such as the absence of loans and liens concerning the property and the date of purchase.
Just like any other document, the bill of sale has its limitations.
- It can only be used for personal property– A bill of sale is only used to transfer private property that the seller owns, such as vehicles, horses or puppies, or household items. A bill of sale cannot be used to transfer anything the seller does not own or has no legal right to transfer.
- It cannot be used for the sale of real estate– A sales bill cannot be used to sell real estate. When transferring real estate, the sale is usually registered on a quitclaim deed or a general warranty deed, though different types of deeds can be used in some transactions.
A bill of sale is evidence that a seller has sold an object of possession to a buyer.
Below are the legal considerations for the bill of sale:
- A bill of sale is a good way for a buyer to get the particulars of a sale in writing before making a monetary transaction.
- A bill of sale may assist the seller in keeping records for accounting purposes.
Frequently Asked Questions (FAQs)
Can I use a generic bill of sale as a receipt for services?
No. When offering or hiring services, a document such as a Service Agreement or an independent contractor agreement is preferable. A bill of sale is only useful when there is a change of ownership of tangible property.
When should I use a generic bill of sale?
Use a generic bill of sale when you are buying or selling valuable items.
Is a generic bill of sale the same as a sales contract?
No. A sales contract is used before the transfer of products. A bill of sale is used during/after the transfer of products to change ownership from the seller to the buyer.
Does a generic bill of sale need to be witnessed and notarized?
A notary is not required in most states to witness the signing of the bill of sale. In Maryland, Nebraska, Louisiana, West Virginia, Montana, and New Hampshire, a notary public must witness all parties signing the paper. In some states, notaries are not necessary.