What different types of bill of sales are there?

The typical bill of sales is a contract between the buyer and seller that sets out the terms of a sale. These terms are usually agreed upon by the parties to a transaction before or when goods are accepted or transferred by one party to another. The bill of sale is usually signed by all parties involved and is sometimes witnessed, depending on the local laws which govern this type of transaction.

Like any other legal document, a bill of sales can have various terms and conditions. Here is a list of the most common types that are used in business today:

Separation agreement:

If its owner or an individual is selling a company is selling personal property (i.e., house, car), then they will create a separation agreement as part of the bill or deed. This agreement is designed to protect the seller from having outstanding financial obligations attached to the sale.

Stipulation for sale:

If another company is buying a company, or if an individual is selling a company (i.e., stock sale; merger), then the stipulation for sale is created as part of the bill or deed. This stipulation is designed to protect the party buying the other business from having other outstanding financial obligations attached to the sale.

Easement:

The easement states that one owner can use another owner's property for a specified purpose, usually utilities. For example, if one owner has a power line running through their property, it needs to go over the neighbor's property too (to reach another home). An easement is written into the bill of sales as permission for that activity.

Warranty deed:

Similar to an easement, a warranty deed states that whoever buys the property will be responsible for maintaining the property for a specified length of time.

Incorporeal hereditament:

Incorporeal hereditaments are used in conjunction with trust deeds. This document states that certain assets of the person who is using it (the trustee) are included in the land's title, and they will be handled by the trustee as if they were his or hers.

Title opinion:

Every bill of sales has a title opinion attached to it. In the title opinion, a lawyer states what type of property is being sold and any outstanding financial obligations attached to it.

A summary bill of sale:

A summary bill of sale is similar to a short form bill of sale. It substitutes the more precise terms in favor of a shorter version with fewer details.

Bill of sales can be used for a variety of reasons and are often used to:

• Transfer rights, title, or ownership to property – The most common use of a bill of sale is to transfer the rights, title, or ownership to property such as a vehicle, machinery, or other similar items.

• Transfer rights, title, or ownership of securities – A bill of sale is sometimes used to transfer securities' rights, title, or ownership. A good example of this is the transfer of shares in a company.

• Transfer rights, title, or ownership to equipment and machinery – Bill of sales are used to transfer legal rights, title, or ownership to equipment and machinery like power generators.

• Transfer rights, title, or ownership to debt – If a borrower defaults on a loan, the lender may use a bill of sale to transfer the rights, title, or ownership of the defaulted debt. This type of bill of sale is often referred to as a Bill of Lading.