What is a bill of sale?

A bill of sale is a contract often used when property such as a car is sold. It records that the item was sold on a certain date by a certain person at a particular location, and it lists the amount of money used in the purchase.

The purpose of a bill of sale is to prove the transfer of title of property. Such evidence is often required in cases such as registering a car. In this case, the bill of sale needs to follow state requirements that might include an odometer reading and/or notarization. While both the buyer and seller can sign a bill of sale, only the seller's signature is necessary in many cases.