When buying or selling goods, it is a good idea to keep a written record of the transaction, for a variety of reasons. A buy/sell agreement (or “bill of sale”) helps ensure that both the buyer and seller agree on the terms of the sale. It can also be helpful for taxes, accounting and other recordkeeping, and for proving that you do (or do not) own something.
If you’re buying or selling a vehicle, check your state’s DMV for what documentation is required — including title transfer, registration, and possibly the completion of a state-specific bill of sale form. Also keep in mind that a simple bill of sale cannot be used to buy and sell real estate, which requires government filings and a more extensive purchase agreement.
Components of a Typical Buy/Sell Agreement
Some components of a typical buy-sell agreement are:
- Party Names. The agreement specifies the names of the parties and possibly also includes contact information for them.
- Description of the Item/s Being Sold. A detailed description of the item and its condition and identifying characteristics, including (if applicable) an identification or serial number.
- Warranties or As-Is. Is the seller providing a warranty on the item sold, or selling it as-is? The buy-sell agreement will provide this information, and if a warranty is offered, the agreement will detail its terms.
- Price and Payment Terms. The agreement will state how much is being paid, when the payment is due, if there are installments or some form of financing, and any other terms relevant to payment.
- Date of Transfer of Possession. The agreement will specify when the item will actually change hands, particularly if this is not concurrent with the signing of the agreement and transfer of ownership.