How to write a contract for selling a car

When you are buying or selling a car privately, one of the most important documents to fill out accurately is the sales agreement, or bill of sale. You won’t be able to transfer a vehicle’s title without a bill of sale.

Some states require that you fill out their state-specific bill of sale when you buy or sell a car. You’ll need to get a state-specific bill of sale if you live in:

If you live in a state that doesn’t require a specific bill of sale provided by the state, you can follow a guideline to write out a good bill of sale. If any of the details are missing from the bill of sale, it can cause delays when transferring the title to the new owner.

Part 1 of 4: Write in the complete vehicle information

Your bill of sale needs to have complete, detailed information regarding the vehicle involved in the transaction.

Step 1: Write the make, model, and year of the vehicle involved in the transaction. Be specific and include model details such as the trim line if it is applicable.

For example, if you have an “SE” model or “Limited” trim line, include that in the model information.

Step 2: Write down your VIN. Write the complete 17-digit VIN number on the bill of sale.

Write the VIN number legibly, making sure that characters cannot be mistaken.

  • Note: The VIN number can be seen on the driver’s side dashboard, the side of the door, on insurance records, the car title, or the vehicle registration card.

Step 3: Include a physical description of the vehicle. Write if it is a hatchback, coupe, sedan, SUV, pickup truck, motorcycle, or otherwise.

Also write the exact color of the vehicle on the bill of sale. For example, instead of just “silver,” some makes will specify this as “alabaster silver.”

Step 4: Include odometer reading. Include the exact odometer reading at the time of the sale.

Step 5: Fill in the license plate or tag number. The license plate number will be found on the original car registration and title from the seller.

Part 2 of 4: Include the seller’s information

Step 1: Write the seller’s full name on the bill of sale. Use the legal name that the DMV will have on record.

Step 2: Write in the seller’s address. Write in the complete physical address where the seller lives.

Note the city and state along with the ZIP code.

Step 3: Include the seller’s phone number. This is generally not required, but it’s good to have in case future contact is necessary, such as a discrepancy in seller’s information.

Part 3 of 4: Write in the buyer’s contact information

Step 1: Write the buyer’s full name on the bill of sale. Again, use the legal name that the DMV will have on record.

Step 2: Write in the buyer’s address. Write down the buyer’s full physical address including the city, state, and zip code.

Step 3: Include the buyer’s phone number. Include the buyer’s phone number for the seller’s protection, such as if the payment doesn’t clear at the bank.

Part 4 of 4: Complete the details of the transaction

Step 1: Indicate sale price. Indicate the sum of money agreed upon for the sale.

Step 2: Indicate if the vehicle is a gift. If the vehicle is a gift, indicate “GIFT” for the sale amount and detail the relationship between the gift-giver and the recipient.

  • Note: In some relationships, depending on the state, there may be tax breaks or fees waived for a vehicle gifted between family members.

Step 3: Write any terms of the sale on the bill of sale. Terms for the sale should be very clear between the buyer and seller.

If the sale is subject to a vehicle history report or subject to the buyer obtaining financing, indicate that on the bill of sale.

If you are the buyer, and you would like to make sure that the car is running in good shape, you can always have a certified technician from YourMechanic give the vehicle a pre-purchase inspection.

Step 4: Sign and date. The seller needs to sign the bill of sale and date it with the finalized sale date.

Step 5: Make a duplicate copy. Write two copies of the bill of sale — one for the buyer and one for the seller.

In both cases, the seller should sign the bill of sale.

If you are selling your car privately, make sure you are protected by a bill of sale. While some states have a state-specific bill of sale that you must use, a properly documented motor sales agreement can be created between the buyer and seller. If you are making a private sale in the near future, follow these steps to finalize a bill of sale before transferring the title to the new owner.

Next Step

Schedule Pre-purchase Car Inspection

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Signing over the title to a company car is similar to the process for a vehicle owned by an individual. The only exception is that in some cases the car is registered to a business instead of a person. The process is about the same as when a dealership signs over the title of a car, which is registered to the dealership, to a buyer.

Step 1

Review the title to confirm if it is titled in the name of someone at the business or the business itself. In some cases, the title shows the business name and the business contact’s name.

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Step 2

Identify the official representative of the business, whether it is you or another party at the company. This is either the owner in the case of a sole proprietorship or an official named in your corporate documents in the case of a corporate entity. If someone’s personal name is listed on the title, that is the person who should sign over the title.

Step 3

Agree on a selling price for the company car with the new buyer. Review the odometer reading on the vehicle. Include both details on your bill of sale, which simply transfers ownership from your company to the new buyer.

Step 4

Ask the owner or company representative to sign the back of the title. Enter the business name, representative name and contact address where requested. Enter the selling price and mileage. Ask the buyer to fill out his section of the car title and sign. Provide him with the title so that he can now register the company vehicle in his own personal name.

Call your business insurer to remove the vehicle from your policy after giving the car to the new buyer.

If the DMV needs to verify that the signer (seller) on the title has the right to sign over the car, you may have to send the buyer a note on company letterhead confirming the validity of the sale. Call your state DMV office in advance to ask for full details.

Faced the need to write a contract for the sale of a car? Think you need professional help? Take your time and try to study this issue yourself. Below you will find a couple of tips that you can use to cope with this matter on your own.

Tips to Write A Contract for Selling a Car

Faced the need to write a contract for the sale of a car? Think you need professional help? Take your time and try to study this issue yourself. Below you will find a couple of tips that you can use to cope with this matter on your own.

Before you start writing this document, you should understand what it is. A contract for selling a car is an agreement that details the sale of a vehicle. Such a contract must fully identify both the buyer and the seller, the vehicle, payment terms, and many other important points that will allow you to complete the deal.

By the way, if you are thinking of buying a new car after the sale, then consider the services of myAutoloan, since here you can get financing if you do not have enough money to buy the desired car. And below you will find tips to help you get started on an important step in selling a car, that is, writing a contract.

Start with Seller and Buyer Information

How to start drawing up your contract? Start with a line that contains information about the seller and the buyer. It must be noted that the seller agrees to sell the vehicle. You must indicate the full name of both the seller and the buyer, addresses, and driver’s license number. In addition, you must add the car brand, model, year of manufacture of the vehicle. Please note that there should be no mistakes in the contact information of both the buyer and the seller.

Provide Complete Vehicle Information

In the contract, you must provide complete data regarding the car you are selling. It is significant to indicate the basic characteristics of the car and its condition. For instance, you need to mark the model and other details, car color, odometer, and so on.

When selling a used car, this must be noted in the contract as well. It is necessary to indicate the condition of the car and note the fact that you do not provide any guarantees on the future vehicle operation. Still, you can add the results of a technical inspection to confirm that the buyer is familiar with all the nuances of the car and existing problems if any.

Indicate Date, Price, and Method of Payment

The contract must contain the exact date of purchase and the real price of the car. It is also vital to indicate the payment method that is suitable for you. For instance, you can mark that you are ready to make a sale only in cash or exclusively by money order.

Dwell on Seller’s Responsibility and Delivery

Next, you need to designate all your responsibilities as a seller. For instance, you can provide the results of a vehicle inspection, registration, and so on. All the items that will be specified in your contract will need to be completed. If your buyer is from another city or state, designate the responsibility for the delivery of the vehicle.

Complete the Contract

To complete the contract, it is necessary that each party carefully reads all the details of the document. After that, the parties can sign contracts, each party must have a document copy.

Car Selling Contract Helpful Tips

  • Be sure to create copies of the result of the vehicle inspection. This document can be useful if the buyer starts making any claims regarding the condition of the car.
  • If possible, it is recommended to use legal advice to draw up a contract or contact professional writers. Today many companies provide services in the field of writing various documentation and the contract for the sale of a car is no exception. Pay your attention to sites that create term paper writing service reviews, where you can find reliable feedback and hire a legal-savvy writer to help you with the contact text.
  • When using templates, use the information provided in the examples carefully! You should not copy a phrase without understanding what they oblige you to and what consequences it can lead to. Study a few examples and use them as a structure, not a source to copy.
  • Never state in the contract that the car will work well for many years and something like that. Replace all of this with “as is”.
  • Often scammers offer to make a money transfer and ask the seller to return the difference in cash. This is one of the most common fraudulent schemes, therefore it is recommended to receive the full amount in cash to secure the transaction.
  • Do not go through a technical inspection before you finish writing your contract. This is because technical inspection has its terms, which may end when you have a contract ready.
  • Check your contract several times. Unfortunately, a few mistakes and misprints in the text can not only cancel the entire transaction but also become a problem in the future.

A Car Selling Contract in Questions and Answers

  • Can I draw up a contract myself?
    There are many templates on the web with which you can correctly draw up such a contract. It is also recommended to use the above tips. If necessary, you can use good writing services or the services of a lawyer.
  • Can the buyer turn off the deal after signing the contract?
    No, in most cases the buyer cannot turn off the deal after the contract has already been signed. This can only be done in court if the buyer reports the fraudulent actions of the seller.
  • What happens after the contract is signed?
    Once both parties have signed a contract, the deal becomes legally binding for both of them. For this reason, draw up a contract carefully and be sure to check what you have written several times.

Wrapping Up

Use these tips to write the car selling contract right. Take a little of your time and attention to this matter and complete the sale successfully.

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Vehicle Sale Agreement

A Vehicle Sale Agreement is a document that can be used to lay out the details of the sale of a vehicle from a Seller to a Buyer. Using this Agreement, the Buyer and Seller can outline the terms and conditions of the sale and describe the vehicle that is being sold. This document can be used to sell a four-wheeled vehicle such as a car or van, a motorcycle, or a boat. The Agreement also contains provisions about the basic logistics of the sale, such as the price and delivery details.

Although a Sales Agreement can be as detailed or as general as required by the parties, it is a best practice to include pertinent information about the warranty, as well as broader legal clauses covering what may happen in case of a dispute. Having a well-written Vehicle Sale Agreement can help protect one or both of the parties in case there is a problem with the sale.

How to use this document

You can use this document if you are a Seller who is selling a vehicle or a Buyer looking to purchase a vehicle from a Seller. In this document, you’ll be able to enter pertinent identifying details, such as the Parties’ respective addresses and contact information. You will also input the most important characteristics of the agreement between the Parties, like a description of the vehicle, pricing, and delivery information. Finally, the Seller must disclose the odometer reading and either affirm the accuracy of the reading or explain reasons why the odometer reading may be inaccurate.

This Vehicle Sales Agreement will help you cover everything that needs to be addressed before the sale of the goods goes through.

Applicable law

Vehicle Sales Agreements, like general purpose Sales Agreements, in the United States are generally subject to both federal law and specific state laws, which cover general contract principles like formation and mutual understanding. Federal law dictates that a Vehicle Sales Agreement must include a disclosure by the Seller of the vehicle’s odometer reading at the time of the sale. Further, state laws cover commercial transactions and business. For example, in Louisiana, Maryland, Nebraska, Wyoming, and West Virginia, a Vehicle Sales Agreement must be certified by a notary.

How to modify the template

You fill out a form. The document is created before your eyes as you respond to the questions.

At the end, you receive it in Word and PDF formats. You can modify it and reuse it.

Guides to help you

Other names for the document: Boat Bill of Sale Agreement, Car Bill of Sale Agreement, Motor Vehicle Bill of Sale Agreement, Motorcycle Bill of Sale Agreement, Scooter Bill of Sale Agreement

If you’re selling your used car privately you’ll need to provide the buyer with a car sale receipt. It’s a legal requirement and creating one is quite easy if you follow all the steps listed below. We’re also attaching a car buyer’s/seller’s contract template for you to download and print.

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What is a buyer’s/seller’s contract?

A buyer’s/seller’s contract is, like the name suggests, essentially a car sale receipt. It proves you’ve sold a specific vehicle for a certain price to a named person on a particular date.

The contract should always include the words ‘sold as seen, tried and approved without guarantee’. But bear in mind that this wording doesn’t affect the legal rights of the buyer. This means that the vehicle must match its description and be roadworthy. There are no grey areas in UK law – it is illegal to sell a car in an unroadworthy condition to anyone.

If you’re selling a used car privately, then you should print off two copies of the car seller’s contract. One is for you. The other one is for the buyer.

Both copies of the buyer’s/seller’s contract need to be completed and signed in person by the two parties. Each of you should then keep safe a copy of this document as a car sale receipt.

Do I need a contract to sell my car privately?

Yes, anyone selling a car privately needs to provide the buyer with a buyer’s/seller’s contract as proof of sale.

What’s included in a car buyer’s/seller’s contract?

Car buyer’s/seller’s contracts are quite straightforward and easy to draft. We’re going to leave a contract template linked here but here’s a summary of everything this private car sales receipt should have.

Car details

  • Make:____________________________________________________
  • Model:____________________________________________________
  • Registration number: _______________________________________
  • Mileage:__________________________________________________

Vehicle identification number match V5C document? Yes/No

Document completed by buyer/seller Yes/No

Document (V5C) exchanged Yes/No

Buyer has received V5C/2 (green slip) Yes/No

Comments & Notes

The contract should always include the following legal wording:

The undersigned purchaser acknowledges receipt of the above vehicle in exchange for the cash sum of £_______________, this being the price agreed by the purchaser with the vendor for the above named vehicle, receipt of which the vendor hereby acknowledges. It is understood by the purchaser that the vehicle is sold as seen, tried and approved without guarantee.

Purchaser ______________________________________________

Vendor ________________________________________________

Date __________________________________________________

How do I write a contract to sell a car privately?

Writing a buyer’s/seller’s contract to use as a receipt when you’re selling your car privately is less scary than it sounds. Check out the template and guidelines we’ve given you above and you’re sorted.

Do you need other documents when selling a car privately?

Yes, when selling a used vehicle privately you will also need the following documents:

  • MOT certificate if the car is over three years old (for the buyer)
  • Any old MOT certificates and other maintenance receipts you may have if you’re selling with a full-service history. This is not compulsory but the buyer will appreciate it.
  • The V5C – Vehicle Registration Document -, which needs to be sent to the DVLA. You’ll need to complete the new keeper details on section 6, sign section 8 and then give it to the buyer.
  • The car’s handbook, service logbook and any receipts you have (for the buyer).

You can check everything you need in our car documents guide.

The payment agreement portion of a private vehicle sales contract is the promissory note, or promise to repay a loan according to specific terms spelled out in the document.

Designate the buyer and seller by full name, and provide contact information for each.

Specify the seller has good title to the vehicle and the legal right to sell the vehicle.

State that the buyer is purchasing a vehicle. Identify the vehicle by make, model, year of manufacture and VIN number, and name the agreed-upon purchase price and interest rate if any.

State that the buyer promises to pay the total named purchase price to the seller, and document the number of payments the buyer promises to make, the amount of each payment, and the dates on which each payment is due.

Specify what penalty is imposed if a payment is late, and how many days late the payment must before the penalty is applied.

Address what happens in the case of default. Identify how many payments must be missed to constitute default, state what notice must be given, if any, to the buyer before the seller repossesses the vehicle.

Name any pre-payment penalties the buyer will incur if he pays off the vehicle in full before the due date of his last installment payment.

Note whether the seller will retain title to the vehicle until the note is paid in full, or whether title will be transferred to the seller with the seller retaining a security interest in the vehicle for the duration of the loan.

Execute and attach a vehicle odometer statement, which sets out the vehicle’s odometer reading at the time of transfer. Federal law requires the odometer reading must be included in every vehicle transfer of ownership.

Provide signature and date of signature lines for all named buyers and sellers, and a notary public statement to be filled in by the notary public at time of execution of the promissory note.

Warnings

Some states, such as Nevada, make it illegal for a private vehicle purchaser to assume payments on an existing auto loan. In these instances the outstanding loan must be paid in full and a new title issued with the seller listed as the lien holder until the private payment agreement is paid in full.

A promissory note template provided by a commercial vendor or your attorney may be helpful in constructing this portion of a private vehicle sales contract.

If your vehicle still has a few miles left in it, you might want to consider selling instead of scrapping when it’s time for a new car. If you’re selling the car yourself, not through a used car dealership, there are a few steps you don’t want to forget.

One of the most important things to remember when selling a car is to write a car sales receipt correctly. An incomplete or inaccurate car sales receipt can cause all sorts of problems in the long run. We know more than one person who has ended up needing a car sales receipt and doesn’t have one, and it was a long and expensive lesson to learn.

So if you’re buying a car, make sure that you get one. And if you’re selling a car make sure you write one up.

Why Is It Important to Have a Receipt When Selling a Car?

Like any other expensive good that you purchase, proof of purchase is essential for a few reasons. Firstly, a car sales receipt is good because it put all of the information out on paper and requires signatures from both parties, thus giving your agreement a paper trail.

Secondly, as a buyer of a used car, you have certain legal protections. Both the seller and the buyer benefit from a detailed car sales receipt because it protects both parties in the event of legal action.

What Does a Car Sale Receipt Look Like?

How to write a contract for selling a car

There’s no one singular form that a car sales receipt is filled out on, though you could certainly purchase a template online and download and use that.

A car sales receipt can simply be typed up on a piece of computer paper, filled with the appropriate information, and signed by both parties. It’s important to make sure all of the right information is on the car sales receipt, and that both signatures are in blue or black pen.

What Information Should Be Included on a Car Sale Receipt?

If both the buyer and the seller hope to be legally protected by a car sale receipt, make sure to include the following information on your receipt:

Names of the seller

The date at the top of the document

Vehicle identification number (VIN)

Year, make, and model

Description of the vehicle’s condition (including odometer reading)

A line stating that the buyer agrees to purchase the car as seen and test-driven

The price of the car

How much the buyer is paid toward the car, and how much they have left to pay toward the car

The buyer’s name typed out

The seller’s name typed out

A place for signatures

When in doubt, list more on the paper than you think you need to. This receipt will protect both the buyer and the seller in the event that something goes south Dash so if you think there’s a chance that you should list it on the receipt, you probably should just go ahead and list it on the receipt.

Here’s a sample form in case you’d like to print it as a template.

How to write a contract for selling a car

Can a Bill of Sale Be Handwritten?

Can a car bill of sale be handwritten? Technically, yes. If you don’t have access to a computer and a printer, you can technically right out your car bill of sale by hand as long as all of the information is still included and the paper is still signed in pen.

Do I Need a Receipt When Buying a Car Privately?

Yes! A car bill of sale protects you as a buyer. Because the bill of sale lists the damages and defaults of the car, you are protected if the seller did not disclose something about the vehicle and you need to get your money back or take legal action.

Receipt from the sale of a car should also include a line about you purchasing the car knowing all of the damages, the history of the car, and having test-driven the car. This line also protects you if the seller withheld information from you, and legal action needs to be taken.

Ready to sell your used car? Here are four laws you need to know when selling your car and check out what you’re liable for as the seller.

How to write a contract for selling a car

Used cars are purchased and sold by private party individuals on a routine basis. Whenever you engage in a car sales transaction, you should issue a receipt that accurately evidences the terms of the sale. The issuance of a sales receipt benefits both the buyer and the seller of the used car. From the buyer’s perspective, they have a written record of the transfer of ownership. From the seller’s perspective, a receipt can be used to show the agreed-upon price (especially if the buyer has not paid in full), the specific model and year of the car and any terms of the agreement, such as that ‘the car was sold as is.’

Create a Receipt for a Used Car Sale

Step 1

Acquire a medium for creating your receipt. Create a sales receipt with a simple sheet of paper and pen or create one on a personal computer that has a word processing application and print it out.

Step 2

State the names of those involved in the sale, along with the date, at the top of the receipt. Designate and identify who the buyer and seller is by placing the caption “(buyer)” or “(seller)” after each party’s name. Add a sentence that demonstrates the intent of the parties to engage in a sale, such as “the buyer agrees to sell the following vehicle(s) to seller:”

Step 3

State the make, model, year and VIN (vehicle identification number) number of the car. You may wish to include additional information such as the color and any distinguishing features of the vehicle.

Step 4

State the agreed-upon total price for the vehicle. If the buyer has only paid a portion of the sale price upon the issuing of the receipt, state how much has been paid and when the remainder of the total is due.

Step 5

State the condition of the car. This is where you may state any known defects that the vehicle has and whether the vehicle is being sold “as is” or with a warranty.

Provide a space at the bottom of the receipt for the signatures of both the buyer and seller of the used vehicle.

I am selling an old car for US$2500. A stranger offered to buy it at my asking price, but the stranger wanted to know if I would accept (installment) payments. This sounds like a very bad idea, so I declined.

But I got to thinking — how would selling a car to another private party on payments even work?

I suppose I could keep the title and let him have the car until it is paid in full, but then I would have to repossess it somehow if he never made the final payment. In this case, would I have to report it to the police as stolen? Does the buyer have any legal right to keep the car if I let him drive it away without the title? Could I be liable if he gets in an accident? How else could this work? Is there a way it is normally done that wouldn’t involve a lot of risk for me or a bunch of extra work?

7 Answers 7

You’re asking about a hypothetical situation where someone sells a vehicle privately on an instalment plan.

Even with (commercial) car dealers, my experience has been that with car sales (as opposed to hire-purchase and the like), the dealer gets their money in full upon release of the vehicle. Any finance is done with another entity. The lender gives the full amount to the dealer and then collects payments from the borrower. In this way, car dealers can get on with the job of buying and selling cars without getting mired in loan defaults.

If you go with this model, you’d introduce the purchaser to a lender, then get your money in full when you hand over the keys. The buyer pays the lender back in instalments. As this is merely a hypothetical, it’s worth noting that you might get a fee from the lender for the arrangement, depending on your negotiating skills. Perhaps a car dealer would be prepared to let you come under their arrangements for a fee – effectively, you’d sell to the dealer and the dealer on-sells the vehicle. I’d imagine the fees involved would make this unattractive, though: there will likely be a big difference between what the final buyer pays and what you get.

If you want to avoid the third party, there is still the question of risk: who assumes the risk?

If you are prepared to assume the risk, you will need to determine how that risk is quantified. After background checks etc, including credit-worthiness, you can either absorb all costs and risks, and hand the keys over with a handshake (or foot-tap / elbow-knock in these COVID times), or you can perform your own actuarial research and pass them on via fees and interest, just like the professionals do. You’ll need to work out contingencies in case the buyer defaults on the payments.

Alternatively, the buyer could assume the risk. Here, the buyer pays you by instalments and only gets possession of the vehicle when the last instalment has been paid. The buyer would then be the one who has to plan for contingencies in the event that you default on the sale (the vehicle gets damaged, is sold or becomes unroadworthy, or you fail to pay the regular licensing fees, etc). You’d also need to work out what to do if the buyer defaults on the instalments.

All told, consumer-to-consumer lending in relation to private vehicle sales is a high-risk, messy affair. Do not do it without professional advice. (And this answer is not professional advice.)

Is there a way it is normally done that wouldn’t involve a lot of risk for me or a bunch of extra work?

This is the real question and the answer is no. The other answers go over the general reasons why you wouldn’t do this. As referred to in the other answers generally either the buyer arranges financing themselves at their bank or the dealer will help place a loan for the buyer; the dealer gets paid in full and doesn’t carry lending risk.

There’s a somewhat common business model in the US referred to as a “Buy-here, Pay-here” used car lot. These dealers typically have very old cars on the lot, for somewhat inflated prices, with loan terms that are utterly awful. They generally don’t really bother checking your credit, but will call an employer to verify you’re employed. And these companies aren’t car dealers as much they’re collection agencies. The way it works is someone with bad credit needs a car and can pay $50 every other week. You sell them a car worth about $1,500 for $2,500 but they’ll pay you $500 today plus $50 every other week for 3 years. Then you add them to your call list. If they don’t pay you check the gps tracker, you send a very scary looking person to go pick the car up and you put it back on sale. This works, ultimately, because you’re collecting on 20 cars (or whatever), not one. And no one is going to “Gone in 60 Seconds” you and put it in a container to another country to actually steal it from you because no one really cares that much about a miscellaneous 15 year old Nissan Sentra that’s in not great shape.

Really, the business isn’t about selling cars because you’ll sell the same car several times; it’s about creating the debt to collect then being very persistent in collecting then ultimately repossessing the car.

The question for you is would you lend this stranger $100? (Not even the $2,500 they’re asking to borrow.) And I mean lend in the true sense of the word, you fully intend to receive the money back and will pursue collection when the borrower inevitably has an emergency. And the answer is probably no. Almost everybody is bad at this part of lending, regardless of what the collateral to the loan is. Everything else is downstream from this, insurance, interest rate, borrower qualification, loan documentation, whatever. It doesn’t matter because the reality is you’re probably not ready pick up the phone and assert yourself in to a conflict with your unwilling borrower who doesn’t think they should pay you if the water pump broke or they got sick and couldn’t get to work this week; and that’s why you shouldn’t get yourself in the business of direct lending.

Buying a car is actually two transactions. One transaction is the price of the car, one transaction is the price of the money (the loan). This person wants you to become a bank, that’s why this is a bad idea. In your situation your buyer is requesting you give up possession and utility of your car and lend him $2,500; and you get no collateral apart from the car he will have legal possession of.

This question has basically nothing to do with whether you file a police report if your car doesn’t come back and you haven’t heard from your borrower (and no this is its own thing called “theft by conversion” and there’s very little the police can do when the person who is legally allowed to have the car just isn’t returning your phone calls, though depending on your jurisdiction you may have to file a police report to be legally in the clear to repossess the car procedurally.). Let the buyer arrange their own financing, and if there are no buyers at $2,500 lower the price a little. Taking $2,250 for the car is still an order of magnitude better than getting the first four payments from this person and nothing else.

It is often an economical business to sell a used vehicle to a random customer instead in a car market or to a car dealer. However such tasks come with a few responsibilities, these include writing a contract of selling and purchasing which comes at the seller’s end. A car sale contract must include a few items like

Identifying buyer and Seller

The most important thing is to mention the legal names of both seller and purchaser, besides this, the contract must have a highlighted section stating the nature of vehicle to be sold and its reason for selling. The contract may include complete addresses of both parties along with their driving license numbers for further verification purposes.

Vehicle Description

The contract must have a section with complete vehicular description. Mentioning the name and make of the car isn’t the requirement. You must provide the full details like color, year, make and model, body type, interior color, odometer reading, chassis and engine number of the particular vehicle.

Provide accurate information

Refrain from mentioning any false statements in the contract. This contract is the test of your integrity. The major concern will be how many kilometers have the car covered so far. As every aspect of purchase is directly proportional to it. If ever the odometer has been replaced or repaired then it must be mentioned in the contract. Otherwise, the entire contract would be of no worth.

To be precise, a car sale contract must comprise of few important well-known things mentioned in a detail. It is an easy document to compose yet releases the seller from any future contradictions regarding the particular sale.

Preview & Details

How to write a contract for selling a car

Car Sale Contract Template

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Download 13 Free Sample Selling Contract Templates to help you prepare your own selling contract.

The protection of the person in the contract depends on the types of terms which have been added in the contract. The selling contract contains the price, amount and terms of delivery. The customer has to check whether those things have been mentioned in the contract which has already been promised by the seller. We also have another compilation of Sales Contract Templates that can also be used depending upon your situation.

Before signing a selling contract, you should be aware of few important things in order to protect yourself.

  1. Enlist all those conditions, under which you will have the right to cancel the selling contract. This includes all the problems which make you a little insecure about your purchase. For example, if you are going to purchase a house and go for an inspection of the house and you see that there are lots of problems in which make you slightly uncomfortable with the agreement.
  2. Be sure that whatever conditions you are going to write in the agreement are being completely explained in the contract. You cannot exclude important point from the contract just because you have already discussed it with the other party. The contract is not concerned with what you have discussed and there is also no importance of verbal agreement between the people. So, it is good if you write all the conditions and elaborate them clearly in the contract.
  3. Buyers often can’t complete the financing because of the value of the home or any product is dropping constantly. So, in such cases, the buyer has to pay additional payments which cause him a big financial loss. So, a buyer is required to protect himself against such purchasing. For this purpose, it is important to mention in the contract that as the value of the property will be dropped, the price of he has to pay will also be lowered.
  4. If the buyer is willing to purchase the property and want to check it before signing an agreement, then you can fix a time and a place with him. Meeting before signing any contract and satisfying the buyer is a very important task to be performed.
  5. If the person is really serious is purchasing your property, then he is expected to bargain for the price. Quite possible you might have discussed the payment in advance and you are also trying to bargain. When both buyer and you will be settled on one price, then you will meet them at bank in order to complete the transaction. Now when you are ready to write the contract, then mention in the contract that the buyer has seen the property completely and he has shown his interest after seeing it even because of which the agreement is being signed. This will make your contract more legal and authentic.
  6. Write about all the transactions in the contract. You should write the real value of the property which you are receiving from the buyer. If the buyer asks you to write less price than actual for security reasons, refuse it and write the original price.

Free Selling Contract Templates

Here is preview of This First Sample Selling Contract Template created using MS Word,

How to write a contract for selling a car

Here is download link for this Sample Selling Contract Template,

Here is preview of another Sample Selling Contract Template created using MS Word,

How to write a contract for selling a car

Here is download link for this Sample Selling Contract Template,

Here is preview of another Sample Selling Contract Template created using MS Word,

How to write a contract for selling a car

Here is download link for this Sample Selling Contract Template,

Here is preview of another Sample Selling Contract Template created using MS Word,

How to write a contract for selling a car

Here is download link for this Sample Selling Contract Template,

Here is preview of another Sample Selling Contract Template created using MS Word,

How to write a contract for selling a car

Here is download link for this Sample Selling Contract Template,

Here is preview of another Sample Selling Contract Template created using MS Word,

How to write a contract for selling a car

Here is download link for this Sample Selling Contract Template,

Here is preview of another Sample Selling Contract Template created using MS Word,

How to write a contract for selling a car

Here is download link for this Sample Selling Contract Template,

Here is preview of another Sample Selling Contract Template created using MS Word,

How to write a contract for selling a car

Here is download link for this Sample Selling Contract Template,

Here is preview of another Sample Selling Contract Template in PDF Format,

How to write a contract for selling a car

Here is download link for this Sample Selling Contract Template,

Here is preview of another Sample Selling Contract Template in PDF Format,

How to write a contract for selling a car

Here is download link for this Sample Selling Contract Template,

Here is preview of another Sample Selling Contract Template in PDF Format,

How to write a contract for selling a car

Here is download link for this Sample Selling Contract Template,

Here is preview of another Sample Selling Contract Template in PDF Format,

How to write a contract for selling a car

Here is download link for this Sample Selling Contract Template,

Here is preview of another Sample Selling Contract Template in PDF Format,

How to write a contract for selling a car

Here is download link for this Sample Selling Contract Template,

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Every “For Sale By Owner” contract made between a seller and a buyer has a few essential ingredients. Whether you are writing your own contract from scratch – probably not advisable unless you have prior real estate law experience – or using one of the many FSBO contracts available online, here are the elements to include.

TL;DR (Too Long; Didn’t Read)

Contract requirements vary greatly from state to state. The best place to start is by downloading a template contract form from your state’s housing agency or a commercial online seller.

Who is Selling and Who is Buying?

Three basic groups of information appear at the beginning of the contract:

  • The names and addresses of the buyer and the seller
  • The address and description of your property. For example: “A three-bedroom single family residence at 661 Pleasant Avenue, Sun City, California, 90065.”
  • The effective date of the contract.

Note that the exact description required may vary from state to state. Some states also require the parcel description you find on your property tax documents, while others do not.

Follow the Money

Documenting the cash aspects of the deal is perhaps the most important part of the contract. The question of who is paying for what falls into three categories:

Purchase price

How much is the buyer paying for the property? In addition to the purchase price, also state the particular terms and conditions of the sale, including credit for any prior payments, such as earnest money, and the description of the buyer’s deposit of the agreed-upon remainder. This same paragraph describes what happens to the earnest money if the sale falls through. If you, the seller, decide for any reason to cancel the contract, you will normally return the earnest money to the buyer. The contract also stipulates what happens to any earnest money or prior payments if the buyer defaults.

Closing costs

Here is where you’ll state how the various tax and title costs are apportioned. In some states, who pays for some or all of these is at the discretion of buyer and seller. In other states, they are the legal responsibility of one of the two parties. Closing costs generally include annual real estate taxes, transfer taxes, title report and title search fees and title policies.

Special conditions

Often, the buyer and seller agree to special conditions. You may agree, for example, to leave one or more pieces of furniture, or the buyer may agree to accept steps or railings “as is” even though they are not code-compliant. These special conditions probably originated with a verbal agreement, but should also be included in the purchase agreement.

Keeping Things Legal

Each state’s real estate contract requirements are available online or from your state’s housing agency. In California, for example, an online search for “California’s real estate contract requirements” returns both a California Department of Housing brochure on the subject as well as several commercial sites offering California real estate contract forms, most of them for under $50. A search for Oklahoma returns commercial sites offering similar forms and the Oklahoma Department of Real Estate website, which offers contract forms without cost.

Use our Purchase Agreement to record the sale of an item.

Updated March 15, 2022

A purchase agreement is a document that outlines the terms and conditions of a sale. Purchase agreements are often used for high-value items or custom orders where the buyer or seller needs assurance that both parties will follow through with the agreed-upon terms.

This document can also be referred to as a:

  • Purchase and Sale agreement
  • Purchase Contract

Note that the buyer can’t use a purchase agreement to prove ownership — you’ll need a bill of sale to officially transfer ownership of the item from seller to buyer.

How to Write a Purchase Agreement

To write a purchase agreement, you need to collect some important information. The agreement should identify the following essential elements:

  • Seller: the party who owns the property and wants to sell it
  • Buyer: the party who will buy the property and become the new owner
  • Property: a detailed description of the property that is being sold
  • ‌Purchase price: how much the buyer will be paying
  • Payment: how and when the seller will be paid

‌Once you have this information, you can put it together as shown here:

  1. ‌List the seller’s and buyer’s information, including their name, address, and contact details such as phone numbers or email addresses. Make it clear which person is buying and which is selling.
  2. ‌Describe the property that’s being sold. If multiple pieces of property are being sold at once, they can all be included here on individual lines.
  3. ‌List the price for the property being sold. If sales taxes or other fees apply, explain who will be responsible for paying those taxes or fees.
  4. ‌Explain how payment will be made by the buyer to the seller and how the property will be delivered.
  5. ‌List any other terms, conditions, warranties, and liability waivers that are relevant to the sale.

To get started creating your purchase agreement, you can use our document builder, which has tips and instructions to help you, or you can write one from scratch using our template as a guide.

Sample Purchase Agreement Form

The following purchase agreement template shows how you can outline the essential details of the agreement between buyer and seller:

An as is sales contract is preferable to sellers because the buyer agrees to buy an item in its current condition. 3 min read

An as is sales contract is preferable to sellers because the buyer agrees to buy an item in its current condition and cannot hold the seller responsible for any defects found with the item after the completion of the sale.

Basics for Creating a Bill of Sale

A bill of sale is a record of a transaction between a buyer and a seller. A sales receipt for a piece of property can function as a bill of sale as it provides evidence that a private transaction has taken place.

When writing a bill of sale, you should include the following information:

  • When the purchase took place.
  • The location of the property.
  • Contact information for all parties involved in the sale.
  • A description of the item sold, including information about its condition.
  • The price at which the item sold and the method of payment.
  • Any loans or liens involved in the transaction.

A bill of sale can be used for transactions selling a variety of items, like:

  • Vehicles.
  • Animals.
  • Electronics.
  • Firearms.

Sellers benefit from bills of sale because they demonstrate that the sale actually took place and that the buyer received the item. Bills of sale can also protect the seller from liability if it indicates the item was sold as is. By the same token, bills of sale are advantageous to buyers because they show that the buyer paid for the item and that they now own the item. A bill of sale may also allow the buyer to insure the item.

You should be sure to use a bill of sale when full-payment is made at the time of exchange or if you are selling someone your personal property as is. If there is a defect with the piece of property, the bill of sale will prove the buyer purchased the item as is, and the buyer will not be able to hold you liable for the defect.

Using an As Is Sales Contract

As is sales contracts can be beneficial for almost every type of sale, but are particularly advantageous when you are selling real estate. For instance, if you are selling your home to another person, an as is contract means that you will not have to cover any repairs to the property after making the sale. The buyer is purchasing the home in its current condition, and they cannot hold you liable for any defects in the property.

Most as is contracts, however, will include an inspection clause. Basically, this means that the buyer can back out of the sale if the home inspection reveals big problems with the property and the buyer no longer wants to complete the purchase.

In an as is sales contract for real estate, there will typically be a section that absolves the seller of liability related to the state of the property. For instance, this section of the contract could include a statement that the seller does not know anything about the property that they have not revealed to the seller. The contract could also include a statement that the seller has not received any government notifications related to the property.

Buyers should insist that they receive a Property Disclosure statement. In this statement, the seller will outline everything that they know about the home, including the age of important components such as the roof or the furnace.

As is contracts are very common in real estate sales. If you are the buyer, agreeing to one of these contracts means that you are buying the property in its current state and that the seller does not have to pay for any repairs to the property. You should make sure that your as is contract includes an inspection contingency, which allows you to schedule a home inspection before completing the purchase. If the inspection reveals a large amount of issues, and you don’t want to cover the costs of repairing these issues, you can back out of the sale.

As is sales contracts are slightly different from residential for sale contracts. With an as is sales contract, the buyer is basically reserving the option to purchase a piece of property if they’re happy with the results of the inspection. With a residential for sale contract, an inspection will also take place, but any needed repairs are the seller’s responsibility. Essentially, as is contracts benefit the seller and residential for sale contracts benefit the buyer.

If you need help with an as is sales contract, you can post your legal needs on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

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If you are selling your property to someone who can’t pay the cost up front, you can draw up your own financing agreement. Write it from scratch or use a template. Provided you write the agreement accurately, it would be enforceable by law.

TL;DR (Too Long; Didn’t Read)

Write up a contract containing all the terms of your agreement, including the length of time of the contract, the amount and number of payments to be made, and the duties of all parties when the payments have completed. The document should be signed by all parties.

Determining the Financing

Before starting the paperwork, both the seller and buyer need to agree to the terms of the financing. Use an online interest calculator to determine the payment plan. For example, if you are selling a friend your used car, you need to agree on the value of the car, the interest rate, how often he will make a payment and the duration of the loan. If the car is worth $5,000 and you’re financing the entire amount, at a 4.5 percent interest rate, paid monthly for two years, the payments would be $218.24.

Writing Up the Agreement

An easy way to create a financing agreement is to use one of the many templates already available online. Some templates can be printed so you can fill in the blanks yourself. Other templates print the completed contract after you enter your information. Your county’s court website may even have forms you can use. Note that in some cases, you may have to register your email address to get the completed document. Other websites may charge a fee.

Information Your Contract Needs

Regardless whether you use a template or decide to write your own agreement, the contract should state the lender’s and borrower’s names and addresses. The contract should also state what is being purchased, with a complete description. In the case of a car, for example, include the vehicle’s make, model, year and identification number. If the item is a parcel of real property, include the address and the legal description, which you can find on your own deed and mortgage.

Include a statement explaining that the owner is transferring the property to the buyer, and when the ownership is being transferred. For example, if you enter into a land contract with someone and agree that if they pay $1,000 per month for five years, the property is theirs, you’ll have to put in a date on which you’ll deed the property to them upon payment of all obligations. In addition, include a statement that the agreement is to be governed by the laws of the state and county where the agreement is being made.

You can also stipulate the consequences if the buyer is late on a payment, such as a late fee that would be due immediately.

Both parties need to sign and date the contract. Consider having two witnesses without a stake in the agreement sign and date it as well. If there is a problem, the witnesses can verify that both parties did agree to the contract. Some states may require that the contract be notarized. If this is the case, wait until the notary public is present before signing.

Common Pitfalls to Avoid

When you loan money or property to someone with the promise that he will pay you back, there is always a risk that he may not do so. If you need to sue the buyer, you will face court costs and legal fees and, if the agreement wasn’t properly drafted, you could lose your money. Avoid owner financing with anyone you don’t know well. To reduce your potential loss, you should also consider asking for a down payment or keep the property in your name until financing is complete. This is often the case in a rent-to-own agreement for real estate.

The higher the value of the property being financed, the more important it is to consult a lawyer before entering into an agreement.

Simple Authorization Letter to Sell Car

[Recipient Name]
[Recipient Address]

I hereby authorize [Mr. John Smith] to sell my car having plate number [213456] and perform all legal transactions and logistics on my behalf.

Scope of Authority:
1) Selling of car to verified buyer
2) Sign receipts and cash in checqes
3) Sign all legal documents
4) [Add additional terms as needed]

Authority Exclusions: [Explicitly list actions that the authorized person can’t perform]
1) Selling of parts of the car.
2) Replacing, modifying the vehicle in any way
3) [Add additional exclusions as needed]

Vehicle Detials:
1) Plate Number: [123456]
2) Model: [Toyota Yaris 2010]
3) Chassis Number: [12356]

Authorized Person’s Details:
1) Name: [John Smith]
2) Identity Proof Type: [Passport]
3) Identity Proof Number: [123456]
4) Signature:_______________________

How to write an authorization letter for selling your car

1) Start by showing your intent to authorize another person to sell your car.

2) It is not necessary to state a reason for authorization but you can mention a reason if you feel it may be needed. Generally speaking, you can authorize people for actions with out a reason.

3) List the car details including car model, car plate number, chassis number.

4) List scope of authorized actions: these are the specific actions that the authorized person can do. This is not mandatory in the case of selling vehicles since there little margin of fraud that can happen. Authorization letters usually contain scope, so it is really up to you.

5) List exclusions. Again this is not mandatory but can help in some situations. Exclusions are actions that your agent is not allowed to do.

6) List identity proof and signature of your agent. You don’t want your letter to fall in the wrong hands and end up with your car being sold to someone else.

Topics on this page:

  • This article covers a simple scenario: “As is” sale of a car to a stranger
  • Steps for the buyer and seller
  • Tips for the buyer and seller
  • The Documents

Steps for the buyer and seller

1. Buyer and Seller: Be sure the buyer understands that the sale is “as is.” In Maryland, an inspection is required before the buyer can register the car. This responsibility generally falls to the buyer, since the buyer is the one seeking to register the car. You may wish to state in writing that the car is being sold “as is.”

2. Buyer and Seller: The seller should park the car on the property of the buyer, or in some place where the buyer can legally keep it. (An unregistered car can be ticketed if it is parked in a public place.) The buyer can also have the car picked up by a tow truck.

3. Buyer and Seller: Sign over the title and receive cash.

4. Buyer and Seller: Bill of Sale options: (Required by law for newer cars being sold cheaply)

a. If the car is older than 7 years, OR if the car is being sold for the blue book value, or more, you are NOT required to use a notarized Motor Vehicle Administration (MVA) Bill of Sale.

b. If the car is 7 years old or newer, AND the sale price is less than the blue book value, you must use notarized MVA Bill of Sale.

c. Whether or not the MVA requires you to use its Bill of Sale, you may wish to use it, or to use your own contract.

Seller’s Next Steps

5. Seller: Remove your license plates and registration certificate from the car when you hand over the keys.

6. Seller: If you recently registered or re-registered the car, you may be entitled to a partial refund when you turn in the plates. If you are seeking a registration refund, fill out and bring the form when your return your plates to MVA:

7. Seller: Return the plates and registration certificate to the MVA. There is no fee for returning license plates. You can also return the plates to any MVA authorized tag and title service, but they might charge you a fee.

8. Seller: Call and cancel the insurance on the car. Canceling insurance before returning your license plates to MVA can result in a large fine. Be sure you get a receipt from the MVA for the license plates.

Buyer’s Next Steps

9. Buyer: Do not leave the car unregistered on a public street or in a public place like a shopping center parking lot. This can result in a ticket.

10. Buyer: Do not drive the car without insurance or without being registered. This can result in a ticket.

11. Buyer: Have the car inspected and take an inspection report showing that the car passes inspection. You may have to perform repairs and have the car re-inspected to do this.

12. Buyer: Have the car insured.

13. Buyer: Register the car. You will need the title, signed over to you; the MVA Bill of Sale, if required; the passing inspection report; proof of insurance; and the titling fee.

Tips for the buyer and seller

Stay safe! Don’t be a theft target. Don’t show up with a large amount of cash in a place where you do not feel comfortable.

Tips for the seller:

  • If you are selling the car “as is,” be careful not to promise that the car works any better than it does. You may wish to use a Bill of Sale or a written contract, even if not required, to state in writing that the sale is “as is.”
  • You may also get more money for the car if you handle the inspection and repair process yourself. You may not want to pay for the inspection unless you have a contract with a buyer, however, because a passing inspection report only remains valid for a certain period of time.
  • The easiest way to not be scammed is to deal only with cash. Some scams involve a buyer trying to overpay you with a bad check or other non-cash means, and having you pay back some in cash to the buyer or a third party. See other scam warnings at “Avoiding online car buying scams.”

Tips for the buyer:

  • Before buying the car, it is a good idea to do a Uniform Commerical Code search to check whether anyone has a perfected security interest in the car as collateral for a loan.
  • In order to register the car after buying it, you will need to prove to the MVA that the car passes inspection.
  • You may wish to arrange for the inspection and repairs before buying the car. If not, be sure you have a legal way to transport and store the car legally until it is registered. It is illegal to drive a car that is not registered and insured. It is also illegal to park an unregistered car in a publicly accessible place like a street or a store parking lot.
  • You can buy a “Temporary Registration” at the MVA when titling the vehicle. The temporary registration is valid for 30 days. This gives you time to get the inspection and repairs you need to register the vehicle. The registration fee will not be collected until the “Maryland Safety Inspection Certificate” is submitted and a one or two year registration plate is requested. However, you will need to pay the title fees, taxes, any lien filing fee, and the temporary registration fee when purchasing the temporary plates.

The Documents

The certificate of title

Before buying or selling a car, make sure the title is free of liens. Liens will be stated on the front of the title.

There is a place on the back of the title for the names and signatures of the seller(s) and the buyer(s), the sale price, the odometer reading, and the date.

The bill of sale or contract

The MVA provides a Bill of Sale form. If this form is required, fill it out and have the buyer(s) and seller(s) sign it in the presence of a Notary Public. (The Notary Public may charge a very small fee.)

Even if you are not required to use the MVA Bill of Sale form, you may wish to use a Bill of Sale or a written contract anyway. You can use the MVA Bill of Sale, or you can write a simple contract, modeled on the MVA Bill of Sale.

If you write your own contract, you may wish to include things like:

  • all of the information that appears in the MVA Bill of Sale form (Vehicle year, make, model, body style, VIN; Name of buyer; Sale Price; Odometer reading; Buyer’s and Seller’s names, signatures, and date of signatures);
  • a statement that the car is being sold “as is,” (or a statement listing any guarantees by the Seller);
  • a statement of any agreement the seller makes about delivery;
  • a statement that the Buyer is responsible for all liability and damages after the sale;
  • a statement that the Seller owns the vehicle and has authority to sell it;
  • a statement that the vehicle is free of all encumbrances, liens, taxes, and fees;
  • a statement that the Seller will defend and beheld responsible for any encumbrance, lien, tax or fee owed because of the car, before the sale;
  • anything else that is relevant.

This list contains some ideas, but you may not need each of these statements, and you may need other statements.

You can have the Bill of Sale or Contract notarized if you wish.

A payment agreement letter is a legally binding contract between someone who borrows money, the promisor, and the person who lends the money, the payee. The letter should include how and when the repayments will be made as well as any penalties if the promisor defaults on payments.

If it is properly written, the letter can be used as evidence in court if it becomes necessary for the payee to go to court to get the money back.

​ It’s a good idea to write a payment agreement letter whenever a person loans money even to a family member, friend or colleague. Loaning money is a business transaction and should be treated as such. The letter will eliminate any possibility of confusion later.

Legal Proof

​This letter will protect both the payee as well as the promisor. The payee wants legal proof that they loaned the money and that the promisor agreed to repay it. The promisor wants legal proof of how much they borrowed, so the payee cannot claim the amount was higher at a later date.

It is recommended to sign the letter in front of a notary. This may require a small fee. If it is not possible, then witnesses should also sign the letter. A copy should be made so both the promisor and payee has one.

Agreement Letters

Agreement letters may also be used at the time of a divorce when the mother requires regular payments from the father for child support. Insurance companies may also request an agreement letter to ensure the client will make the proper deductible payments.

Payment letters are also useful for people who want to repair their credit report. Most lenders will be happy to work with debtors if they give a clear offer of payment. ​

​ If the letter is between business partners or for official loans, the amount of interest that will be charged for the duration of the loan should be mentioned. For loans between friends, interest is often not charged, but should be mentioned if it is charged.

The letter should be very concise to avoid confusion. It should include:

  • The legal name of both the promisor and the payee
  • The total amount of the loan
  • The terms of the repayment
  • What the payments are for
  • When the payments are due
  • How the payments will be made
  • When the last payment should be made
  • Any penalties for defaulting
  • Any grace period for late payments

Signature Area

The letter should have a signatory area at the bottom, and it is recommended that there be space for a witness signature for each side. The format should be accurate if it is to be seriously considered in the event the payee needs to go to court.

The two main types of payment letters are for a lump sum and for a payment plan. The information at the beginning and end of the letters is the same. Only the body of the letter is different. Here are samples of each type of payment agreement letter.

​If a notary is not used, the letter can be sent by certified mail by the payee or promisor to themselves. This will give the time and date the letter was signed. This may be crucial information if the payee takes the promisor to court.

Sample Payment Agreement Letter

FULL NAME OF PAYEE
FULL NAME OF PROMISOR
DATE OF LOAN
DATE REPAYMENT IS DUE
TOTAL AMOUNT DUE

TERMS OF AGREEMENT:

I, FULL NAME, borrowed $500 from FULL NAME on DATE. We both agreed that the money would be repaid in a series of scheduled payments.

I, FULL NAME, will repay the loan with a personal check in a series of $100 payments every month for five months starting DATE. The payments will be given to FULL NAME on the first of every month beginning with June 1st with the last payment being made on October 1st.

I, FULL NAME, will pay a $5 per day late charge for any payments that are not on time as agreed until the loan is paid in full.

The payee and the promisor agree to the payment agreement terms listed above.

Signature of Promisor DATE
Printed full name and address, email address, phone number of promisor

Signature of Payee DATE
Printed full name and address, email address, phone number of payee

Signature of Witness(s) DATE
Printed full name and address, email address, phone number of witness(s)

Example of letter body with lump sum payment:

I, FULL NAME, borrowed $500 from FULL NAME on DATE. The money is to be repaid in one lump sum. I, FULL NAME, promise to repay the full amount, $500, with a personal check on DATE. I agree to pay a late fee of $5 per day until the loan is paid in full if I am not able to make the payment on the agreed date.

The payee and the promisor agree to the payment agreement terms listed above.

If you are looking to sell a car in the Netherlands, you will be pleased to know that there are several options available to you.

Your car will not last your lifetime. It either wears out – a good reason to sell before it loses value – or it no longer suits your lifestyle. Luckily, there are some fairly simple ways to sell a car in the Netherlands. You can use an intermediary, such as a dealer or buying site, or make a private sale to an individual.

Wijkopenautos

Want to sell your car without the stress? Then check out Wijkopenautos.nl. Wijkopenautos is an online platform for buying and selling used cars in the Netherlands. Whether you’re looking to trade in your urban runaround or simply find out what your motor is worth, visit Wijkopenautos.nl and get an appraisal today.

Sell your car to a dealer

Selling a car is quick and easy at a local car dealer. Most dealerships that sell used cars in the Netherlands will immediately buy your car, minimum questions asked. Though you’re assured of a quick, guaranteed sale by selling a car to a dealership, you often must settle for a lower price.

Many car dealerships also offer the possibility to exchange your old car for a new one; they will sell the new car to you for a favourable trade-in price.

Sell your car to a buying site

One of the fastest and most financially sound ways to sell a car in the Netherlands is through an RDW-licensed site. There are many services available, including Wijkopenautos.nl or ikwilvanmijnautoaf.nl, that allow you to enter your car information, determine the current value, and sell it near value.

These sites vary in services; some require an inspection, and others don’t. Some may guarantee a sale; but some may not. With Wijkopenautos.nl, for example, sellers may make an appointment for free RDW-approved valuation; afterwards, they instantly receive a bid on the car. If the seller accepts this offer, the sale closes.

How to write a contract for selling a car

One of the primary benefits of a car buying site – besides the speed at which a car can sell – is the lack of required paperwork. The car selling site will arrange all paperwork regarding the vehicle registration transfer, as well as issue you a vrijwaringsbewijs; this proves that the car is no longer under your name.

Sell your car in an auction

Auction sites have begun to grow in popularity; however, like marketplace websites such as Marktplaats, you are not guaranteed a good sale. You are also responsible for a proper presentation of the car. Again, you must provide high-quality photographs of your car, write a description, and place them on an auction site.

You must then wait for a decent offer to come along, but don’t expect any miracles. Although auctions are a popular way of selling a car in the Netherlands, a good price is not always possible.

Sell your car to an individual

Selling your car privately is one of the most popular ways to sell a vehicle in the Netherlands. There are plenty of ways to do so, too. You can sell to friends or family, hang a “for sale” sign in the car or use a website such as Marktplaats or Speurders.

With these websites, you are the only one responsible to advertise your car and prepare it for sale. Ensuring that the car has been thoroughly cleaned, includes its manuals and has been inspected heighten the chances that it will be seen among the thousands of cars for sale online. High-quality photos of the exterior, interior and even under the hood also improve the likelihood of a sale.

Though it’s not required, having the car inspected – according to the required yearly APK (Algemene Periodieke Keuring, or periodic technical inspection) – will build confidence in the buyers. In fact, some buyers will disregard cars that must still go through an APK; this is because it can be a sign of expensive necessary repairs. Doing so, however, may mean that you need to invest in repair work.

Selling privately could be more profitable, but the process takes time and patience. You may get no bids or too many bids that fall through. You must also make yourself available to potential buyers who wish to come look at the car and test drive it.

Once someone agrees to purchase the car, print a document that serves as a contract. This should state that the car (name brand and model) has been sold for the agreed price.

The RDW outlines the vehicle registration process – in which ownership of the car is transferred to the buyer – and states that it must be done by the buyer at a kentekenloket (registration desk). This is often located at PostNL post office or an RDW office; you, as the seller, may also go, but it is not necessary. The buyer must be in possession of specific documents in order to transfer the car. These documents are:

  • Vehicle registration card (kentekencard)
  • Tenaamstellingscode, or ownership code

Those that have papers issued before January 2014 may provide other documents:

  • Tenaamstellingsbewijs, or proof of ownership, which shows the car is registered in the owner’s name, including the owner’s name, birthdate and residence, as well as when the date of registration
  • Overschrijvingsbewijs, or “proof of transfer,” which is a registration certificate that demonstrates ownership of the car

Note that if you sell your car to someone outside of the Netherlands, for example Belgium, you cannot go to a kentekenloket to transfer ownership of the car. Instead, you and the buyer must go to an RDW office to begin proceedings to export the car; this, of course, requires more paperwork.

How to write a contract for selling a car

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A bill of sale is a document that verifies you’ve sold your car and provides basic information about the vehicle and the terms of the sale. Not all states require them, but it’s a good idea to create one — it can prevent misunderstandings between you and the buyer.

If you’re ready to sell your car , find out if your state provides a bill of sale form. If not, you can write your own with the information provided below.

Finding your state’s bill of sale form

Your state’s motor vehicle department website might have a bill of sale form you can download and fill in. You can also search online for the following: “automobile bill of sale [name of state].” Carefully scan the results and select one that comes from your state’s motor vehicle department. The website will probably end in “.gov.”

For example, the web address for California’s Department of Motor Vehicles is www.dmv.ca.gov and it provides a bill of sale that you can download.

While you’re on the department’s site, check your state’s bill of sale requirements. A few states require that the bill of sale is notarized (stamped by a notary public as additional legal proof of its accuracy).

Writing a bill of sale for a car

Even if your state doesn’t offer a downloadable vehicle bill of sale form, you might be able to find a free template online — or you can easily write one yourself.

A bill of sale for a car should include:

1. The date of the sale.

2. A description of the car, including its:

Year, make and model

Vehicle identification number

License plate number

3. The selling price of the car. If the car is a gift or partial gift, you should still create a bill of sale. Indicate that the car is a gift or a partial gift and state the reduced price, if any money changed hands.

4. Warranty information. Most private party sales are assumed to be “as is,” meaning that there’s no warranty. But if you have a different agreement, put it in the bill of sale.

5. The full names, addresses and signatures of the buyer and seller. Above the signature there’s language stating that the information is accurate. Generally, it reads something like this: “I declare under penalty of perjury that the statements herein contained are true and correct to the best of my knowledge and belief.”

Once you complete the document or fill in the blanks, the buyer and seller should each receive a copy.

About the author: Philip Reed is an automotive expert who writes a syndicated column for NerdWallet that has been carried by USA Today, Yahoo Finance and others. He is the author of 10 books. Read more

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How to write a contract for selling a car

How to write a contract for selling a car

Updated May 05, 2022

A vehicle private sales receipt is given to a buyer as proof of payment for the purchase of a car from a private seller. The receipt may also be used to acknowledge the payment of a deposit towards the purchase price of a vehicle. In most cases, vehicles will be sold used for a lesser price than its original value.

If the seller has increased the value of the vehicle in some way and stands to profit from the sale, they should use the standard Car Sales Receipt and include the requisite sales tax in their price as this would count as a capital gain.

In most states, the buyer will need to present their bill of sale, title, and receipt at the Department of Motor Vehicles when they register the vehicle in their name.

1 – Download This Private Sales Receipt To Document A Payment For A Vehicle

Each button labeled by file type near the image will access the previewed receipt template. Determine the program you wish to use then download a compatible version of this receipt to your machine.

2 – Furnish The Calendar Date Of Sale With The Seller’s And Buyer’s Identity

Open your private vehicle receipt then input the calendar month, day, and year when the discussed payment was successfully received on the empty line attached to the “Date Of Sale” label on the left. How to write a contract for selling a carThe Seller’s name must now be recorded on the first blank line on the right-hand side. Notice, this line is designated with the label “Seller Name,” then lead into three more blank lines. How to write a contract for selling a carThese three lines (“Mailing Address,” “City, State, ZIP Code,” and “Phone Number”) will support the Seller’s identity by displaying two appropriate means of communication maintained by this entity. How to write a contract for selling a carThe left side of this page will require additional information before we continue to the body of this receipt. Use the area beginning with the “Buyer Name” line to document the legal name of the Vehicle Buyer. Follow this identity with the mailing address and the current telephone number where the Buyer can be reached on the blank lines labeled “Mailing Address” through “Phone Number.”

3 – Produce A Description Of The Vehicle And The Submitted Payment

It should be understood that properly documenting the vehicle concerned with this payment is crucial to the effectiveness of this receipt. The section titled “Car (Vehicle) Information” will answer this need nicely by organizing such information in a logical and easy to read display. Use the blank spaces in the first column to document the vehicle identification number (“VIN”), the vehicle’s “Make,” its Year,” and the “Color” of the vehicle. Note that if the vehicle is more than one color or a pattern, this must be reported in this column. The second column will require the vehicle’s “Registration #,” “Model,” “Mileage,” and any “Add-Ons” (i.e. T.V., Warmed Seats, etc.).A basic definition to the payment this receipt accounts for can be provided by one of the two sentences that follow the vehicle details you supplied. You will need to mark the checkbox corresponding to the statement that can best be applied to the situation. Be prepared to disclose some supplemental information in whichever statement you place in effect.

If the payment that was submitted is part of a larger sum (that the Buyer will pay then), mark the first checkbox. The amount that was physically paid should be written out on the first blank line in this sentence. It should also be recorded numerically on the second empty line.

How to write a contract for selling a carIf the payment is the remainder (or the total required for the Buyer to own the vehicle, then mark the second checkbox. The first line in this statement needs the amount that was received written out while the second available space will need this value reported numerically. How to write a contract for selling a carAfter describing the results of this payment and the amount that was paid, this receipt must also solidify how the payment was made. This can be done by checking one of the appropriate boxes after the bold words “Payments Made By.” Mark the box attached to the word “Cash,” “Check,” or “Other” to properly report the method of payment. Keep in mind that if a check was used, the “Check Number…” should be recorded in the space available. Note that if this payment was not made by cash or check, then you must mark the “Other” box and describe the payment yourself on the line supplied. The last requirement of this receipt is that both the Buyer and the Seller must sign their names in the spaces provided. The space on the left has been supplied so the Buyer may provide a signature in his or her area. The Seller will also have a reserved area of signature. He or she should sign the “Seller Signature” line then issue the invoice appropriately. It is strongly recommended that you make sure both signature entities have received their own signed copy of the completed receipt.

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How to Sell a Car in Maine

According to the website Edmunds.com, selling your car privately comes with certain legal responsibilities, but the paperwork you need is determined by your state. In all states, you must sign over your car’s certificate of title to the buyer, which transfers ownership and releases you of all liability.

Certificate of Title

Your car’s certificate of title is the most important document in the private sale of your car. If your car’s title has any liens from a bank or credit lender, you must clear the title by paying off the loan in full, which will release the lien to your state’s Department of Motor Vehicles, or DMV. Depending on your state, the DMV may require you to pick up the title in person, or it will be mailed to you at the address on the title. If your title is clear from liens but is damaged or lost, you can apply for a duplicate title from the DMV. For a link to each state’s DMV website, see Resources.

State Documents and Requirements

In addition to your car’s certificate of title being transferred to the new buyer’s name, your state may have additional paperwork requirements, such as a smog certificate, release-of-liability forms or a notice or bill of sale. Some states will require you to turn in the license plate, while others will allow you to transfer it to another vehicle. For the exact requirements in your state, visit your state’s DMV website for a checklist.

Selling Your Car ‘As Is’

Unlike car dealership sales, private car sales do not fall under any state transaction requirements, such as implied warranties, lemon laws or the Used Car Rule. However, selling your car “as is” does come with some legal requirements, particularly if you write up a contract as part of the sale, or if an existing car warranty is signed over to the buyer. The Federal Trade Commission website warns that even though a warranty may still be active, you should check the fine print to make sure that the warranty is transferrable to a new buyer.

Signing Over the Title

When it comes time to hand over your car keys, both the seller and buyer section of the title must be filled out, which is located directly on the title. Double-check the odometer reading on the title, as this will prevent any future liability issues. Finally, photocopy all signed documents as proof of the transaction.

  • Edmunds: How to Close a Used Car Sale
  • Bankrate: Obtaining your car title after loan payoff
  • Federal Trade Commission: Buying a Used Car
  • Dealertrack. “Electronic Lean & Title.” Accessed Sept. 8, 2020.
  • Direct Auto Insurance. “Car Titles.” Accessed Sept. 8, 2020.

Leah Waldron is the head of Traveler Services at First Abroad, a gap year travel company based in Boston and London. As a travel, research and LGBT news writer, Waldron has publication credit on magazines and newspapers including “Curve Magazine,” “USA Today,” “The Sun Sentinel” and the “The Houston Chronicle.” Waldron has a bachelor’s and master’s degree in creative writing from Florida State University.

Last Updated On June 27, 2018 By Letter Writing Leave a Comment

The sale agreement letter normally falls under the category of letters that are written for acceptance or rejection of orders. Such orders can be placed with the supplier and dealer. It can also contain various elements like the price quotations, estimate mode of payment, date of delivery, transport details, dispatch options. Through this letter, all details regarding a specific transaction or a sale are sent through. It is imperative that all details mentioned in the Sale Agreement letter are correct.

This letter helps keep track of details of a specific transaction. A Sale Agreement Letter is sent from one business party to another, where buying and selling are involved. When such a transaction takes place, it is essential to keep track of it and make records. You ought to keep an eye on what is coming in and what is going out. The Sale Agreement Letter can also help in settling disputes, in any, regarding the details of a specific transaction.

Table of Contents

Sale Agreement Letter Writing Tips

  • The letter should emphasize aspects like date of delivery and payment, price quotations, mode of payment, etc.
  • The letter should also specify the mode of delivery.
  • The letter should be made taking into consideration the interest of both parties.
  • There should not be any space for ambiguity, and the terms and conditions should be clear to both parties.
  • The language of the letter being drafted should be in simple language.

Sale Agreement Letter Template

Use our free Sale Agreement Letter to help you get started.

Date: _____ (Date on Which Letter is Written)

Subject : _______________________(Mention the purpose)

Kindly note that this letter is to put the agreement to legal format that as me, the chairman of company _______ (name and address) is agreeing to the terms and conditions made with you as the second party_____ (name and address) to execute the contract to supply 1,00,000 pieces of toilet soaps to me from the coming month onwards. The amount will be transferred to your account on the ____(mention the date) of every month on the receipt of the commodity.

If you fell the agreement suits your bill, please sign it as a token of approval for the same.

Hope you will get back to me very early

(Name and signature)

Sample Letter

Block 7, La Salette,

13th October 2013

Mr. Ramgopal Charan

Subject: Sales Letter Agreement

We at this moment accept the order placed before us by your manager on behalf of your company Shivi Industries on 12th October 2013 for the bulk purchase of toilet soaps of X brand. As per the agreement, we are supposed to get 1,00,000 soap pieces of 250 Gms weight in fully packed and covered. And no excuse regarding the quality of the product will be entertained.

As per our agreement, you should supply the product on or before every 5th from the ensuing month of December onwards, and the bulk rate for the one lakhs pieces will be Rs 3,00, 000 and it will be paid to you through the online transfer of money the very date specified in the letter above.

The contract is initially for 2 years, and if either party finds it difficult to continue the contract, they are free to terminate it with a three months time being given to the other party.

If you find the above condition satisfactory, sign the contract in approval.

Email Format

The following is the Email Format to be followed for a Sale Agreement Letter.

To: [email protected]
From: [email protected]

Subject: Sales Letter Agreement

We at this moment accept the order placed before us by your manager on behalf of your company Shivi Industries on 12th October 2013 for the bulk purchase of toilet soaps of X brand. As per the agreement, we are supposed to get 1,00,000 soap pieces of 250 Gms weight in fully packed and covered. And no excuse regarding the quality of the product will be entertained.

As per our agreement, you should supply the product on or before every 5th from the ensuing month of December onwards, and the bulk rate for the one lakhs pieces will be Rs 3,00, 000 and it will be paid to you through the online transfer of money the very date specified in the letter above.

The contract is initially for two years, and if either party finds it difficult to continue the deal, they are free to terminate it with a three months time being given to the other party.

If you find the above condition satisfactory, sign the contract in approval.

A consignment agreement allows someone else to sell something you own, on your behalf. Even after the consignor’s fee or commission, selling this way may result in your receiving a better price. Get the details on how this type of agreement works.

by Brette Sember, J.D.
updated May 02, 2022 · 3 min read

A consignment agreement is a contract that places an item the consignor (or owner) owns with the consignee (or seller) for the consignee to sell. The consignee often takes a commission or fee and then the remainder of the sale price is paid to the consignor.

How to write a contract for selling a car

An example would be if Tyra takes a dresser to Ken’s Consignment Furniture Store. Tyra owns the dresser and is placing it with Ken to sell in his store. If Ken sells the dresser, he keeps a commission or fee and Tyra receives the rest of the sale price.

Consignment Agreement

A consignment agreement is a contract between the consignor and the consignee, and should include these basic provisions:

  • Parties. Provide the names and addresses of the consignor and the consignee.
  • Item(s) for sale. Identify or describe the item(s) for sale.
  • Pricing. The contract should state the sale price of the item or say that it will be sold at a reasonable price for its age and condition. The agreement could give the consignee the right to discount the item’s price with or without the consignor’s approval.
  • Payment. The consignee has the right to collect payment from the buyer and must pay the consignor the balance due after the consignee’s fees or commission is subtracted. The contract should state how long the consignee has to make payment to the consignor.
  • Expenses. The agreement should state what if any expenses the consignee is responsible for.
  • Record-keeping. The consignee is responsible for keeping records relating to the consignment.
  • Ownership. The contract normally states that the consignor is the actual owner of the item for sale and the consignee is responsible for its care and for any loss or damage to the item while in the consignee’s possession.
  • Insurance. The consignee is usually required to carry insurance that will cover the consigned item.
  • Termination. The agreement discusses how the contract can be terminated, such as by a certain date if the item is unsold, or if the consignee goes bankrupt, leaves the area, dies, or if the consignor dies.

Types of Consignment Arrangements

A consignment agreement can be exclusive or nonexclusive. If it is exclusive, it means that the consignee is the only person who has the right to sell the consignor’s item. If it is nonexclusive, it means other consignees may be attempting to sell the same item.

An example of a nonexclusive consignment is if Mark is trying to sell his car. He tells car dealers Andre and Cassandra that whoever can sell his car for him will get a 10% commission. Both Andre and Cassandra have the right to try to sell the car and the first one to find a buyer makes the sale.

Types of Consignment Merchandise

Clothing and household goods are commonly consigned items. Contracts for these types of consignments commonly include provisions that if the consigned item is not sold by a certain date and if the consignor does not pick the item up within a certain number of days after that, the item will be donated to charity. Note that popular used clothing stores like Plato’s Closet are not consignment stores. They buy the clothing directly from you and then resell it. A true consignment store pays the consignor only once the item sells to a buyer.

Automobiles are also sometimes sold on consignment. Instead of selling your car to a dealer at a price below market value, you place your car with them to sell on consignment. In most cases, the car will sell for a price closer to the market value and you will likely make more, even after paying the consignee’s fee or commission.

How to Create a Consignment Agreement

You can write your own consignment agreement by looking at samples online; however, to be certain your agreement conforms to your state law and completely protects you, it is best to work with an attorney or an online service provider who can create a consignment agreement that is professional and complete.

Using a consignment agreement can be a great way to sell something you don’t want to try to sell yourself. The consignee handles the marketing and sales and takes their commission. And you receive most of the sale price without having to do a lot of work.

Especially when it comes to large or complex transactions, using a purchase agreement can be the best way to handle the sale and purchase of goods. Find out what this legal document should contain and when you should use it.

by Edward A. Haman, Esq.
updated May 02, 2022 · 4 min read

If you or your company will be buying or selling goods, you will want to have some type of documentation of the transaction. Especially for more complex transactions, you may need to use a purchase agreement, which is a legal contract that sets forth the terms of the sale and purchase of goods.

How to write a contract for selling a car

Sale and Purchase Documentation

Generally, a purchase agreement is used for large purchases of goods when there is some degree of complexity to the transaction. The complexity can relate to various aspects, such as delivery of the goods or terms of payment. A purchase agreement is signed by both the seller and buyer before the goods are delivered and before any payment is made. Once it is signed by both parties, it becomes a binding contract. Although not the same as a purchase order, which is simply an offer to purchase goods, a purchase agreement may also be called by other names, such as sales contract, purchase contract, or purchase and sale agreement.

In terms of a purchase agreement, the term “goods” applies to various types of tangible assets and does not apply to services. Real estate transactions may also use a purchase agreement, but real estate is a separate category of property from goods.

Simpler transactions can use less complicated documents, such as a receipt or a bill of sale, which are typically given in conjunction with the transfer of the goods and the payment. For example, if your company buys one computer, a simple receipt may be sufficient. Or, if you are buying a car that must be registered with your state government, a bill of sale might be used. However, if your company is purchasing numerous computers or a fleet of trucks and the goods will be delivered and paid for over a period of time, a purchase agreement is more appropriate.

Using a Purchase Agreement

Either the seller or the buyer can prepare a purchase agreement. Like any contract, it can be a standard document that one party uses in the normal course of business or it can be the end result of back-and-forth negotiations. If additional terms are negotiated that are not included in the standard agreement, these can be stated in a purchase agreement addendum.

In addition to creating an agreement that fully covers all aspects of the sale, it is important that the agreement be signed by the individuals who have the legal authority to bind the parties to the contract. If you or the other party is an individual person or a person operating a business as a sole proprietorship, that person should sign the agreement. For another type of business entity, the agreement should be signed by an officer or director of a corporation, a manager or member of an LLC, or one of the partners in a partnership.

Content of a Purchase Agreement

Any purchase agreement should include at least the following information:

  • The identity of the buyer and seller
  • A description of the property being purchased
  • The purchase price
  • The terms as to how and when payment is to be made
  • The terms as to how, when, and where the goods will be delivered to the purchaser
  • Signatures of both parties

It is also common for a purchase agreement to include other details, such as:

  • Any amount that is to be paid as earnest money, or down payment
  • Any warranties the seller makes regarding the seller having legal ownership of the property
  • Any warranties the seller makes regarding the quality of the goods or their suitability and fitness for their intended use by the purchaser
  • The consequences of default by either party
  • Any disclosures that may be required by law

Being sure that the agreement fully sets forth the responsibilities of the other party can be of vital importance in the event you decide you want to get out of a purchase agreement, which can usually only be done if there is a breach of contract by the other party.

Purchase Agreement Forms

A purchase agreement reflects the nature of the goods and the industry involved. For example, a wholesale purchase agreement for steel contains different terminology from a commercial purchase agreement for a large number of computers and printers.

An online search for “purchase agreement template” or “purchase agreement form” will reveal numerous websites with forms for many situations. For example, when two businesses plan to engage in a continuing relationship, they often use a special type of contract called a product supply agreement. If you will be selling goods to a federal government agency, special contracting regulations come into play that dictate what needs to be included in a purchase agreement. These regulations may vary depending upon the agency and type of goods involved.

For relatively complex transactions, it is good business practice to use a comprehensive purchase agreement. A well-crafted document can help assure that both parties understand what is expected so as to avoid potentially costly misunderstandings.

Sometimes called a promissory note or an installment agreement , a payment agreement letter defines a transaction between at least two parties.

  • Simple Payment Agreement Letter [Free Sample]
  • Write A Loan Agreement Between Friends
  • Setting Up A Loan Agreement Between Friends And Family

Such agreements are common between companies that are agreeing to exchange money for goods or services.

These documents also may be utilized by insurance companies who ask customers to agree to certain payment terms.

Payment Agreements

Payment agreements may also be arranged between private parties. Friends, family members and colleagues may all use these documents to help ensure fair dealings when loaning or accepting money.

The Payment Agreement protects each party in various ways. It clearly defines what the transaction is, such as a loan between friends. It identifies the parties and how much money is involved.

It further delineates how and when the money will be paid back. For instance, the party loaning the money may require that the borrower pay them back with a cashier’s check while prohibiting the use of a personal check.

Interest Rates

Moreover, the agreement may define what sort of penalty is involved if the money is not paid back as agreed upon. Interest rates are not always a part of these agreements.

If the borrower will be required to pay interest, then this should be defined in the agreement, including how the interest will be calculated.

  • How To Make A Payment Contract
  • How To Create A Promissory Note
  • How To Make A Legal Contract Without A Lawyer

It is strongly recommended that the agreement be notarized or at least witnessed and signed by an impartial third party.

This makes the agreement easier to defend in court, and makes it less likely that the document will be tampered with later. Each party to the agreement should receive a fully-executed copy for their files.

Sample Well-Defined Payment Plan?

This level of detail is necessary for the protection of both parties because it makes it far less likely that disputes will arise.

The promisor, the party borrowing the money, receives the assurance that the payee, the party loaning the money, will not claim that the loan was actually for a much larger amount.

Moreover, the written agreement makes it possible for the payee to prove that the promisor had a well-defined payment plan and that they did not comply with the schedule.

Accordingly, it is less likely that litigation will arise from a dispute, and if litigation does occur, then the agreement may be what the court relies upon to make a decision.

A single page document is all that is required to make a binding Payment Agreement Letter. The following examples are templates that can be easily customized to suit a variety of transactions.

Sample 1 – Simple Payment Agreement Letter

Full, Legal Name Of Payee
Full, Legal Name Of Promisor
Loan Date
Total Amount Of Loan
Final Due Date For Repayment

I, Payee Name (“Payee”), borrowed $1,000 from Promisor Name (“Promisor”) on Loan Date. By signing this agreement both Payee and Promisor acknowledge that Payee will pay back Promisor using the following payment schedule.

Payee agrees to repay Promisor with a personal check for $100 on the first of each month for 10 months beginning with January 1, 20__.

The last payment will be made October 1, 20__, at which time the loan will be fully repaid.

Payee further agrees to pay a $35 per week late charge for every week that payment is delayed after the first of the month.

This $35 late charge may be prorated as a $5 per day charge for each day that the payment is late for segments of time shorter than seven days.

Both Payee and Promisor agree to the payment agreement defined above.

__________________________________________
Signature of Payee with Date

__________________________________________
Signature of Promisor with Date

__________________________________________
Signature of Witness or Notary with Date

Sample 2 – Simple Payment Agreement Letter

This is an agreement entered into by the Client, [Name and Address of Client], and the service Provider, [Name and Address of Provider] that is valid on this date, [DATE].

The Client hereby appoints the Provider for the services described under Designated Services. The Provider agrees to deliver the services and be paid according to the description under Scheduled Payment.

The Provider will take the Client’s two dogs, both beagles, for a 45 minute walk every day. The dogs will be on leashes and may be taken to the local park Name of Park.

The provider will go to the Client’s house to get the dogs at or about 11:00 am and return them to the house after 45 minutes. If either dog has a bowel movement, the Provider will clean the area in the appropriate way.

If the Provider is not able to perform the above mentioned duties, the Provider will inform the Client at least 24 hours in advance unless the reason is an emergency.

The Client will pay the Provider thirty dollars $30 at the time the Provider brings the dogs back to the house after the walk. At that time, the Provider will sign a receipt for the payment.

If the Client fails to pay on time, the Client will add five dollars $5 to the salary the next time the Provider walks the dogs. If the Provider fails to walk the dogs, no payment will be given.

This agreement is governed by the laws of the County of [COUNTY] in the state of [STATE] and any applicable federal laws. This agreement can be terminated by either the Client or Provider one week, seven days, in advance of the termination date.

The authorized agents the Client and Provider affix their signature to the terms of the above agreement.

[Signature of Client DATE] [Printed Name of Client]

[Signature of Provider DATE] [Printed Name of Provider]