Bill of Sale: Definition, When To Use, How To Write
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What Is a Bill of Sale?
A bill of sale, proof of purchase, proof of payment, As Is Bill of Sale, Proof of Sale, Sales Slip, or Sales Receipt, is a document or receipt used to transfer the ownership of an object such as a vehicle. This document becomes important when you need to buy or sell personal property. You may associate bills of sale with used vehicles, but you can use this document for a variety of items.
A bill of sale will detail a transfer of property or sale of items between a seller and buyer. This type of document serves as legal evidence that the seller transferred his or her rights to the assets described in the bill of sale.
A bill of sale must include key information such as the following:
- Names of the buyer and seller.
- Contact details.
- A description of the item(s) being sold.
- The price of the item(s).
- Methods of payment.
- Warranty details.
You'll typically see a bill of sale used to record the sale of automobiles, motorcycles, watercrafts, or other objects associated with transportation. You can also use a bill of sale to record the transfer of personal property, such as purchasing or selling a used car. A bill of sale is also useful for transfer of other personal property such as a bicycle, furniture, a laptop, or an animal such as a horse or other livestock.
This legal document records a transfer of ownership of an asset from one party to another. As a rule, the seller will draft the document. A bill of sale should include all details of the transaction as a way to protect both parties if a disagreement about the condition of the item or terms of the sale occurs. Since a bill of sale will include details about the condition of the item sold and any warranties, as well as terms of payment, this document acts as legal proof of the agreement.
When Should I Use a Bill of Sale?
You should use a bill of sale for the following circumstances:
- You own property you would like to sell and need to have a record of the purchase detail for accounting records. Examples of property include a motor vehicle (such as a car) or other personal property, but not real estate.
- You plan to purchase a motor vehicle or other property from a private seller, and you want to record the proof of purchase and the details of your agreement in writing.
- A proof of purchase is required. Many states will require a signed bill of sale in cases when you are transferring a title with a state's department of motor vehicles (DMV) or buying and selling branded livestock.
Some transactions involve an exchange of property but do not require a bill of sale, including the following:
- Real estate. You can't use a bill of sale to transfer real estate between owners because real estate transactions are more complicated than the types of transactions listed above. You will need additional forms from your state or local government, or a quit claim deed (a legal instrument used to transfer interest in real property) when you're dealing with a real estate transaction.
- Performance of services. A bill of sale transfers ownership, not services. If you're providing or obtaining a service such as business consulting or babysitting, you should instead use a general contract for these services. If you own a business that receives payment for selling products, a general receipt is sufficient.
- Small-scale sales. Although deciding whether you want a bill of sale for inexpensive property is a matter of personal preference, many people don't feel that creating a bill of sale for less expensive items is necessary. A bill of sale is not required for small-scale sales.
If you're not certain whether you need a bill of sale, you should consult an attorney . An attorney can help ensure you're using the correct document and are including all information that you need for your transaction.
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Transferring Ownership of a Vehicle With a Bill of Sale
You must understand the intricacies of the bill of sale with motor vehicles if you plan to buy or sell an automobile. An automobile bill of sale represents that the right to ownership of the vehicle has been transferred. However, the vehicle's certificate of title represents the actual ownership. Every state requires this certificate of title, a document that records official proof of ownership of a vehicle.
If you are the purchaser of a vehicle, you can apply for a title in your name at your state's DMV when you have the signed bill of sale and pay a title transfer fee. In some states, the DMV requires a bill of sale signed by both the seller and the buyer. Some states require a notarized bill of sale as well.
Sale Contract vs. Bill of Sale
Make sure you understand the differences between a sale contract and a bill of sale when deciding which document you need.
A sale contract:
- Is executed between a buyer and seller.
- Details the terms for a buyer to agree to purchase an item and a seller to agree to sell it.
- Records the future sale of an item. A sale contract is used before an exchange of an item occurs.
A bill of sale:
- Transfers ownership.
- Provides details of the exact item a buyer will receive.
- Promises that the person selling the items has a valid title to the item as well as the right to transfer the title.
- May include warranties about the item sold and its future performance, or show that the item was sold "as is" and disclaim all warranties.
- Used during or after a product exchange.
Bill of Sale Templates
How Can I Write a Bill of Sale?
Some county tax assessor-collector's offices or local DMVs provide bill of sale forms that you can use. Some sellers also choose to create their own bill of sale. Since requirements vary by state, check your state's requirements to make certain your document complies with them. In some states, only the buyer needs to sign the bill of sale. Other states will require both the seller and buyer to sign. Requirements for notarization also vary among states.
Include the following essential pieces of information:
Basic data
- Name and address of the seller.
- Name and address of the buyer.
- Date of transaction.
- Previous owner(s) (in other words, if someone first sold the item to the seller, this fact should be included).
Description of the item
- Identification number.
- Serial number.
- Make.
- Model.
- Design.
- Size.
- Color.
- Any special marks or features.
- Any faults of the item.
- Special conditions to the sale (for example, if the item is sold as is or with warranty).
Additional information needed for vehicle sales
- VIN, or vehicle identification number.
- License plate number.
Payment information
- Amount paid (write out in words and in numbers).
-
Method of payment.
- Did the buyer pay in installments or in full?
- Did the buyer pay with cash, credit card, bank deposit, or check?
-
Agreements (if applicable) concerning
- Deadlines for pending payments.
- Terms for late payments.
- Interest rates.
Before completing the transaction, make sure the bill of sale is completely legible and verify that all information and signatures are accurate. Finally, make copies of the document for both the buyer and the seller.
Protect yourself as either a buyer or seller with a carefully constructed bill of sale the next time you enter into a legal transaction.
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ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
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Contracts
Bill of Sale
Illinois
Is a bill of sale necessary for a private vehicle sale?
I recently sold my car privately and did not use a bill of sale, as both parties agreed on the terms verbally and exchanged payment. However, I am now concerned about potential legal issues that may arise from not having a written agreement. I would like to know if a bill of sale is necessary for a private vehicle sale to protect both the buyer and seller.
Randy M.
A bill of sale is not legally required in every state for a private vehicle sale, but skipping it can lead to unnecessary problems. Whether your state mandates it or not, having a signed bill of sale is one of the simplest ways to protect yourself during and after the sale. It provides written proof of the transaction, including the sale date, purchase price, vehicle identification details, and whether the vehicle was sold “as-is.” If the buyer fails to transfer the title right away or incurs tickets or tolls before doing so, you could still be on the hook unless you have clear documentation showing you sold the car and on what date. While a verbal agreement can be legally enforceable, it’s not enough to protect you if a dispute arises. Let’s say the buyer later claims the car wasn’t in the condition you described, or you’re contacted by law enforcement or a toll agency asking why your plates are still connected to unpaid charges. Without a bill of sale or other written record, it becomes your word against theirs. In contrast, a simple, signed document can resolve that question instantly. That’s why states like New York, Vermont, Montana, and a handful of others require a bill of sale as part of the title transfer process. In states where it’s not legally required, such as California or Texas, the DMV still recommends using one for your own protection. In your situation, where the sale has already taken place, it’s not too late to create a retroactive bill of sale and ask the buyer to sign it. Include the basic facts: date of sale, buyer and seller names and addresses, VIN, odometer reading, sale price, and a short acknowledgment that the car was sold “as-is” without warranties. Most buyers won’t object to signing something that protects them as well. You should also file a release of liability or notice of transfer with your state’s DMV if you haven’t already. This document tells the DMV that you're no longer the owner and helps protect you from liability if the buyer fails to register the car right away. For future transactions, always use a bill of sale, even for low-value vehicles or sales to friends and family. You can find attorney-drafted versions through legal platforms like Contracts Counsel. The time it takes to fill it out is minimal compared to the potential headaches of dealing with a DMV problem or legal dispute down the line. Make sure the buyer transfers the title quickly. Until they do, you might keep getting their tickets and toll bills in the mail, and you'll have to deal with the headache of proving you no longer own the car if any legal issues come up. You may also want to keep a copy of any communications you had with the buyer confirming the sale, such as emails, texts, or a receipt of payment. These won’t replace a formal bill of sale, but they could help support your position if needed. If you encounter resistance from the buyer or complications with the DMV, that’s a good time to speak with an attorney in your state who handles vehicle sales, consumer protection, or civil liability. The attorneys here on Contracts Counsel would be happy to assist you.
Arts
Bill of Sale
Connecticut
How do I use a bill of sale?
I am looking to buy and would not want to be subject to scam. Bill of Sale with regards to collectible trading cards. I am looking to buy a collection of Magic: The Gathering cards and I am wondering the course of action using a Bill of Sale. I want to ensure the other peer is not listing a falsely advertised collection and that the cards are not counterfeit and in the case they are not as advertised or not real, what protections do I have as the buyer?
Jane C.
You need an attorney to draft a contract of sale.
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Contract for Asset sale with collateral
Location: New Hampshire
Turnaround: Less than a week
Service: Drafting
Doc Type: Bill of Sale
Number of Bids: 2
Bid Range: $999 - $1,000
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