The
term Bill of Sale originally referred to any writing
by which an absolute disposition of personality
for value was effected or evidenced. A common feature
of such dispositions is that the owner mortgagor
remains in possession and exercises all the attendant
rights of ownership, which may be so overwhelming
as to induce a third party to accept the same chattel
as a security for a grant, albeit without notice
of the first mortgage . This scenario made the Bill
of Sale a veritable tool of fraud.
The
evolution of various Bills of Sale laws was to curb
the use of the Bill of Sale as a means of defrauding
innocent persons. The first of such being the Bills
of Sale Act, 1854 which was repealed and re-enacted
by the Bills of Sale Act 1878 which was almost on
all fours with the 1854 Act. Further developments
led to the enactment of the Bills of Sale Act 1882.
A
Bill of sale has been defined as a legal document
made by the seller to a purchaser, reporting that
on a specific date at a specific locality and for
a particular sum of money or other value received,
the seller sold to the purchaser a specific item
of personal property, or parcel of real property
of which he had lawful possession . The Blacks Law
Dictionary on its part defines a Bill of sale as
an instrument for the conveyance of title to personal
property, absolutely or by way of security. According
to Omotola the Bill of Sale is a form of legal mortgage
of chattels . Bullen and Leake and Jacobs define
a bill of sale as a document transferring a proprietary
interest in personal chattels from one individual
(the grantor) to another (the grantee), without
possession being delivered to the grantee.
In
essence, a Bill of Sale is a written instrument
showing the voluntary transfer of a right or interest
or title to personal property, either by way of
security or absolutely, from one person to another
without the actual physical possession of the property
leaving the owner and being delivered to the other
party. It is clear from the definitions above that
the Bills of sale are essentially of two types:
The Absolute Bill of Sale and the Conditional Bill
of Sale .
The
Absolute Bill of Sale
Absolute Bills of Sale, which do not represent any
form of security whatsoever, are simply documents
evidencing assignments, transfers and other assurances
of personal chattels, which are substantially no
more than mere contracts of sale of goods covered
by the common law of contract and the sale of Goods
Law.
The
Conditional Bill of Sale
The
conditional Bill of Sale, which is the main focus
of this paper, refers to any assignment or transfer
of personal chattels to a person by way of security
for the payment of money . The conditional Bill
of Sale creates a security in favor of the grantee
of the bill whereby the grantee is given personal
right of seizure giving right to a security interest
of a possessory nature.
It
should be noted that there are other forms of security
over goods such as a pledge and contractual lien
which also only give right to a security interest
of a possessory nature .
A
good example of a Conditional Bill of Sale is where
a creditor gives a loan and has transferred to himself,
as collateral or security for the loan, the title
of the goods or other personal property of the debtor.
The physical goods or other property however remains
with the debtor.
See
Also:
Bill
of Sale Template - Sample
Bill of Sale - Online
Bill of Sale - General
Bill of Sale Form
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