Bill Of Sale
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Limited Warranty:

Limited warranties for used vehicles can cover whatever the Buyer and Seller agree upon. At Bill-of-Sale.com, we've drafted a limited warranty provision that covers what most Buyers and Sellers would agree upon if they wanted to include such a provision. Here's how it works: The Seller "discloses" any known, non-cosmetic defects in the vehicle by writing a description of them into the contract (if you check the "limited warranty" box, you'll be prompted for a description of each such defect on the next page). Because these defects have been disclosed to Buyer, Buyer agrees to accept them without recourse against Seller. However, in the event that the Buyer discovers a non-cosmetic defect in the vehicle that was not disclosed by Seller in the contract, Buyer can return the vehicle for a full refund. You choose how many days the Buyer has to exercise the return option.

This limited warranty provision works well to protect both the Buyer and the Seller. It encourages the Seller to disclose any known problems with the vehicle, so that the Buyer knows what he or she is getting. At the same time, the Seller shouldn't be required to make costly repairs if a vehicle defect is discovered shortly after the sale. This is why the return option works so well: if there's an unknown problem with the vehicle, the Buyer gets his or her money back and the vehicle is returned to Seller. Both parties are restored to the the position they were in before the agreement was signed.

Signed Counterparts:

Customarily, parties to a contract all signed the same document which became the "original". Having one original document may be more difficult, however, when the buyer lives in one state and the seller in another. In that situation, it may be easier to fax the buyer a copy of the contract, or "counterpart", and have the buyer fax back a signed copy. So long as all of the parties are signing identical counterparts of the original contract, it doesn't matter whether all of the original signatures are on the same document. It doesn't even matter if you've got an original signature; a legible faxed signature can be just as binding.

Litigation:

In this provision, the Seller states that he or she is not a party to any litigation that could affect his or her right to sell the vehicle. An all too common example of this type of litigation is divorce, where one spouse may try to sell a vehicle that the other spouse is claiming in the divorce proceedings. By including this provision in your Bill-of-Sale.com contract, the Seller is prohibited from knowingly selling a vehicle that might be subject to a conflicting court order.

Buyer's Authority:

This provision simply states that the Buyer has the proper authority to purchase the vehicle. The provision is applicable where the Buyer is an agent of another person or business entity. Without such a provision, the Buyer could try to back out of the contract by claiming that he or she did not have the proper authority to purchase the vehicle.

Buyer's Remedies:

When a party breaches a contract, the non-breaching party has certain rights called "remedies." Believe it or not, a party's remedies don't necessarily include the right to force the other party go through with the sale. Instead, a party may be limited to recovering just his or her economic losses resulting from the failed deal. At Bill-of-Sale.com, we've drafted a buyer's remedy provision that gives the Buyer the explicit right to force the Seller to sell the vehicle.

No Liens or Judgments:

In this provision, the Seller states that he or she owns the vehicle free and clear of any conflicting interest that would affect the Seller's authority to convey clean title. A common example of a conflicting interest is where a bank or other lender has a lien on the vehicle to secure a loan to the Seller. Without such a provision, the Seller could try to back out of the deal by claiming he or she was unable to pay off the lender.

No Warranty:

In most private party vehicle sales, the Seller does not intend to include a warranty with the sale of the vehicle. Instead, the vehicle is sold "as is." This means that if something goes wrong with the vehicle after it is sold to the Buyer, the Buyer is solely responsible for fixing the problem and cannot return the vehicle to the Seller. If that is how your agreement is structured, check the "No Warranty" box for your Bill of Sale or Vehicle Purchase Agreement available at CarContracts.net

If in your agreement the Buyer has the right to bring the vehicle back after discovering a problem, read the description of the "Limited Warranty" provision to see if it captures the terms of your deal.

Vehicle Defects:

At Bill-of-Sale.com, we've included the option to list specific Vehicle defects in both our Bill of Sale and our Vehicle Purchase Agreement.

It may seem counter-intuitive to put problems with the Vehicle in writing. However, by disclosing vehicle defects in writing at the time of the sale, the seller can prevent the buyer from later claiming these defects were intentionally concealed.

Attorney's Fees:

An attorney's fees provision says that in the event your agreement ends up being litigated, the loser in court has to pay the winner's attorney's fees. Without such a provision, the laws of most states require each of the parties to pay their own attorney's fees regardless of who wins in court. Often, just the threat of having to pay the other party's attorney's fees is enough to dissuade someone from filing a lawsuit. If you want an attorney's fees provision in your contract, check the attorney's fees box.

Seller's Authority:

This provision states that the Seller is the owner of the vehicle to be sold or has the proper authority to sell the vehicle. The provision is applicable where the Seller is an agent of another person or business entity that actually owns the vehicle. Without such a provision, the Seller could try to back out of the contract by claiming that he or she did not have the proper authority to sell the vehicle.

No Side Deals:

In order to prevent either party from alleging there were side, oral agreements that aren't set forth in the written bill of sale or vehicle purchase agreement, you must include an "Integration" clause in your document. "Integration" is a legal term meaning ALL of the parties' agreements are "integrated" into the contract. In other words, there aren't any verbal "side" agreements about the sale that aren't in the contract. An example of such a side agreement might be where a buyer would "remember" that the seller orally promised to reimburse the buyer for the cost of fixing the muffler.

Seller's Remedies:

When a party breaches a contract, the non-breaching party has certain rights called "remedies." Believe it or not, a party's remedies don't necessarily include the right to force the other party go through with the sale. Instead, a party may be limited to recovering just his or her economic losses resulting from the failed deal. At Bill-of-Sale.com, we've drafted a seller's remedy provision that gives the Seller the explicit right to force the Buyer to purchase the vehicle.

Contingent on Funding:

In some cases, a Buyer will need to borrow the funds necessary to purchase the vehicle. If that is the case with your agreement, including this provision requires the Buyer to use his or her "best efforts" (a legal term meaning, loosely, "try really hard") to apply for and get the loan. However, if the Buyer fails to get the loan by the Closing Date, then he or she is not obligated to go through with the purchase.

This provision is an optional clause available in the Vehicle Purchase Agreement available at Bill-of-Sale.com

Arbitration:

Traditionally, disputing parties to a contract had to take their case to a judge or jury to get a resolution. Solving disputes through the courts can take months or years and often costs thousands of dollars in attorney's fees. One alternative to lengthy and costly litigation is a process called "arbitration." As with litigation, parties in arbitration present their evidence to a neutral arbitrator, who acts like a judge. The arbitrator hears the evidence and makes a binding ruling. The benefit of arbitration is that you can have your case heard in weeks rather than months, and your attorney's fees should be significantly less. The drawback to requiring arbitration is that you give up a lot of rights; such as having your case heard by a jury, that you would have in the courts. If you want to insert a provision in your agreement requiring disputes to be resolved through arbitration, rather than the courts, check the arbitration box.

Time is of the Essence:

A provision stating that "Time is of the Essence" makes clear that timeliness is important in your agreement. Wherever Buyer or Seller agree to perform an obligation (like pay for the vehicle or transfer title) by a certain date, his or her failure to do so is considered a breach of the contract. Without a Time is of the Essence provision, some courts will allow a party to the contract to perform his or her contract obligations late.

Statue Of Frauds:

Nearly every state has enacted a "Statute of Frauds". The Statute of Frauds requires that all agreements for the sale of goods over $500 (including vehicles) must be in writing. If you are buying or selling a car over for over $500 you must have the deal in writing! If you don't, the other side can back out of what you thought was a done deal! Sound unbelievable? Check it out for yourself by calling your attorney.

You may be wondering why any state would enact a law that allows people to get out of their agreements, but that is not what the Statute of Frauds was designed to do. The Statute of Frauds was enacted to encourage people to put important agreements in writing. Most people would put their deals in writing if they knew it was a requirement (as you now know!). Unfortunately, most people have never even heard of the Statute of Frauds. They don't know about this law until they end up in their lawyer's office or worse, in court, suing to enforce an unenforceable oral agreement. In spite of the good intent of state legislatures, the Statute of Frauds has become a tool for dishonest people to use as an excuse to get out of agreements they regret having made. A Bill of Sale or Vehicle Purchase Agreement totally eliminates the Statute of Frauds problem by getting your deal in writing.

Buyer's Remorse:

One of the most common problems with a vehicle sale is "buyer's remorse." This happens where a buyer enthusiastically purchases a car, then comes down from the high of having made a new, expensive purchase. Maybe the buyer feels she paid too much, or wasn't told about a problem with the car, or simply wishes she had purchased a different vehicle she saw the next day in the classifieds or on the internet. When this happens the buyer frequently tries to "undo" the deal. She may bring the car back, cancel her check to the seller, or even have an attorney write a letter demanding return of the purchase price. A Bill of Sale or Vehicle Purchase Agreement is the strongest defense against buyer's remorse. Why? Because when the buyer's signature is on a written document setting forth all the terms of the deal, the buyer knows he is locked into the deal. He can't argue with his signature on a document where the terms of the contract are all set forth in black and white. This stops him from even trying to lie his way out of his agreement.