The bill of sale is a relatively simple legal document that transfers the title of an asset from one individual or entity to a new owner. In general, it includes the minimum information necessary to confirm that the transfer of the ownership of an asset has taken place. Also, the document affirms the fact that the transaction was conducted in a manner that was agreeable to all parties involved in the transaction.
This document emerged as a way to minimize the incidence of fraud, as well as limit the potential for illegally seizing property. The present basic format has its origins in the 19th century, and came about as a means of complying with regulations that were intended to prevent abuse of existing laws regarding the acquisition and holding or property, primarily land.
Essentially, the bill of sale today is a document that is drafted by the seller, and is couched inn verbiage that is intended to document all the pertinent details of the sale. Central to the structure is the names and identifying data related to both the buyer and seller. This will always include the legal name of the buyer and the seller, and may also include the permanent physical addresses of both parties. A brief description of the item that is being sold will also be included.
In the event that there are any identifying marks, such as a signature of the manufacturer or a serial number, that data is usually included in the bill of sale. A third essential component is the price of the item that was agreed upon by both parties, whether the remuneration is money or in exchange for some other asset. The document is considered complete and binding at the point in which both the buyer and the seller sign it.
There are actually two forms of this document. The absolute bill of sale is used when the transaction for the transfer of the title is considered complete. As a condition, the seller acknowledges receipt of payment, transfers title to the buyer, and relinquishes all claims on the property. The conditional bill of sale allows the seller to acquire control of some form of collateral and retain the asset until such time as the buyer fully renders the agreed upon payment for the purchased item. In the event of a default on the purchase agreement, this document is used to gain permanent title to the collateral.