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A Bill of Sale is used to protect both the seller and the purchaser in the case of any future issues. Since many purchases and sales between individuals are transacted using cash, it can be hard to prove that an item was received or paid for without proper documentation.
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As-is or Warranty: Selling an item “as-is” means the buyer accepts the item in its current state, including any defects that might not be immediately apparent. This type of sale protects the seller from having to refund the buyer or repair the item if issues arise after the sale. When selling something as-is, it’s important to state so clearly on the bill of sale. In some cases, a seller may choose to offer a warranty as an incentive to buyers. In this instance, sellers should explain on the bill of sale what will and will not be provided or covered under the warranty, and for what period of time.
A Bill of Sale should only be used for "as-is" purchases when payment in full will be made once the item is exchanged, and both parties accept to buy and sell the item in its current condition. It expressly disclaims any warranties that relate to the quality or fitness of the product. If you are looking for a contract that includes more specific terms, provides warranties or you wish to have full payment made after the item is provided
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A bill of sale is comparable to a receipt, whereas a sales agreement acts as a contract. Since a bill of sale may contain as-is or warranty information, it’s important to read the document closely and make sure all the terms are understood and accurate. Especially for high-price items or more complicated agreements, a seller or buyer may want to have a third party, such as an attorney, check the bill of sale to ensure critical information isn’t missing.
Although the seller typically provides a bill of sale for a transaction, both buyer and seller should receive a copy of the signed document for their records. Full payment should be made upfront unless a payment plan or other terms have been agreed to — if this is the case, it should be indicated on the bill of sale. If a buyer is unable to pay the full amount at the time of purchase, include a promissory note that outlines the terms of a payment plan or funding from a lender — that would constitute a conditional bill of sale, which is described further in the list of templates below. In order to sell an item, a seller must be the rightful owner, so buyers may want to see proof of ownership before agreeing to purchase an item, or ask that the seller include a sentence on the bill of sale that certifies his or her right to sell.