Bill of Sale
A Bill of Sale allows you as a Buyer or Seller to set out the terms for the sale of a motor vehicle.
4.4 (57 reviews)
Last updated December 19, 2024
Under 10 minutes
Suitable for Australia
Written by
Edwin Montoya Zorrilla
Reviewed by
Damin Murdock
Document Overview
A Bill of Sale sets out the sale of a specific item from the Buyer to the Seller, stating that the Seller transfers the legal title of the item to the Buyer for a certain price. Using a Bill of Sale ensures that you and the other party understand the terms of the sale, and helps prevent any disputes from happening.
This is our standard Bill of Sale that is tailored for the purpose of selling or purchasing a motor vehicle, however, we also have variations suitable for selling animals, trailers or boats. It is important to note that a Bill of Sale is not appropriate for real estate or property transactions, or for the sale of shares or stock.
You Can Use this Bill of Sale if:
- You are a selling a Motor Vehicle or other similar items; or
- You are buying the above item(s).
What does the Bill of Sale cover?
- Details of both parties;
- Details of sale item;
- Consideration and payment details;
- Seller warranties; and
- Inspection details.
Other names for Bill of Sale include:
- Sale Agreement; and
- Sale Contract.
What makes a bill of sale legally binding?
A bill of sale is a legally binding agreement between a seller and the purchaser of goods. The legally binding effect stems from the signature of both parties, the amount of money paid for the goods by the purchaser, and the transfer of ownership by the seller.
Is a bill of sale required for proof of purchase?
A bill of sale can be a very important document because it can be used later on as evidence of purchasing a good. If the goods are damaged in transit or stolen, the new owner will want to be able to verify that they had in fact purchased the goods at the time and that their insurance would therefore be liable for replacing any lost or damaged goods.
What does ‘in consideration’ mean on a bill of sale?
‘In consideration’ means the exchange of benefits between the parties to the bill. Often this would be the amount of money paid for the goods in exchange for the transfer of ownership over the goods.
What is a bill of sale most commonly used for?
Although they cover a variety of sales, a bill of sale is commonly used for the sale of Motor Vehicles, furniture, electronics and animals (particularly horses).
When is a bill of sale insufficient?
A bill of sale should be able to clearly identify the goods that are subject to the transaction. It should also clearly list the circumstances surrounding the transaction, such as the location and time and amount of money paid for the goods. However, if the bill of sale is unclear in any regards, its legal effectiveness may be questioned.
Contact us on 1800 529 728 to learn more about if a Bill of Sale is suitable for your business
The Legal Risk Score of a Bill of Sale Template
Our legal team have marked this document as low risk considering:
- The document allows the buyer a set period to inspect the vehicle, but there is a risk if the inspection does not thoroughly verify the vehicle's condition, as the seller only guarantees that the odometer reading is accurate to their knowledge and that they are unaware of any hidden defects.
- The buyer is required to pay the full amount upfront, as acknowledged by the seller, which could pose a financial risk if the vehicle does not meet expectations or if subsequent disputes arise regarding the vehicle’s condition or ownership.
- While the seller agrees to defend the title of the vehicle against claims, there is a risk of potential legal challenges regarding ownership or rights to possession that could involve the buyer in legal disputes.
Bill of Sale Checklist
Complete your free Bill of Sale with our checklist
Verify Payment and Receipt
Ensure that the payment is made as specified and a receipt is issued to document the transaction.
Conduct Inspection
Utilize the allowed days to have the Motor Vehicle inspected by an independent mechanic to confirm its condition.
Transfer of Title and Registration
Complete the necessary paperwork to transfer the title and registration of the Motor Vehicle to the buyer’s name to ensure legal ownership.
Document Storage
Store a signed copy of the Bill of Sale in a safe place for both parties to reference in case of future disputes or for record-keeping purposes.
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