What is a Bill of Sale?

A Bill of Sale is essentially a trumped-up receipt, unless you are in England. A Bill of Sale is a document affirming that the rights of ownership of an asset have been transferred from one party to another, in exchange for “full consideration,” which is another word for compensation or payment.

A receipt from a retail transaction can be considered a Bill of Sale, but a full-fledged bill of sale should accompany large transactions like car sales and so on. The British definition of Bill of Sale, however, is somewhat different.

There is an Absolute Bill of Sale, and a Conditional Bill of Sale. In both instances, in England, the original owner tends to retain the property for which ownership is transferred. This is more likely to be used in a business setting, where ownership rights are transferred but a company retains possession and use of an asset.

A Conditional Bill of Sale, on the other hand, is used when collateral is pledged for a loan. The asset which serves as collateral is designated as ‘sold’ to the lender, even though the property remains with the borrower.

This also applies when ownership and possession is taken for a good, whose final sale is predicated on the condition that full payment is made according to the agreed-upon schedule. Where a loan is involved, it is also known as a Security Bill of Sale.

These distinctions are part of the Victorian-era laws of England, and don’t necessarily translate to other parts of the world like the United States. The English laws concerning Bills of Sale was reviewed in 2015 and a consultative paper about 250 pages long can be reviewed if you have the time.