What is a Bill of Sale?
What statutory formalities govern
the validity of bills of sale?
What documents must be filed with
the Registrar?
What happens if the legal
formalities for bills of sale are not followed?
What happens to Bills of Sale after
they are lodged with the Registrar?
What is a Bill of Sale?
A bill of sale is a written
document given by way of security for the payment of money by which one
person ("the grantor") transfers to another person ("the
grantee") property he has in specific goods or 'personal chattels'
together with a right or power to seize or take possession of the goods or
personal chattels in the event of non-payment of the debt or loan.
"Personal Chattels" are
defined in the Bills of Sale Act, Cap. 306 to mean goods and chattels such
as household effects and articles capable of complete transfer by
delivery. These are mainly motor vehicles or household furniture.
An important feature of a bill of
sale is that while property in the goods or chattels specifically
mentioned in the document is assigned or transferred to the grantee,
physical possession of the goods or chattels is retained by the grantor.
What
statutory formalities govern the validity of bills of sale?
The following
formalities should
be observed in respect of bills of sale:-
a) Prescribed format of bill of
sale to be followed: Section 24 of the Bills of Sale Act, Cap. 306
provides that every bill of sale made or given by way of security for the
payment of money by the grantor shall be void and of no effect unless made
in accordance with the Form set out in the Third Schedule to the Act. The
essential features of the prescribed Form include, inter alia, the date of
execution of the document, the names and addresses respectively of the
grantor and grantee, a statement as to the consideration received by the
grantor for the bill of sale, words of assignment or transfer to the
grantee, a promise to repay the debt together with interest at an agreed
rate and at stipulated times and a Schedule or Inventory setting out the
specific goods or chattels comprised in the bill of sale;
b) Stamp duty to be paid on
original bill of sale: Section 8A of the Bills of Sale Act, forbids
registration of a bill of sale unless the original bill of sale is stamped
in accordance with the Stamp Duty Act, Cap. 91;
c) Prescribed mode of attestation
and registration to be observed: Section 10 of the Bills of Sale Act, Cap.
306 requires the execution of a bill of sale to be witnessed by one or
more credible witnesses who are not parties to the document. Section 10
also requires the bill of sale together with the Schedule or Inventory, a
true copy thereof and an affidavit of execution containing certain
statutory particulars to be presented to the Registrar within seven (7)
clear days of the date of its execution;
What happens if the legal
formalities for bills of sale are not followed?
Section 8 of the Bills of Sale Act,
Cap. 306 provides that a bill of sale shall be void in respect of the
personal chattels comprised therein unless it is duly attested and
registered in the manner prescribed within seven (7) clear days of its
execution, and unless it truly sets forth the consideration for which it
was given.
What documents must be filed with
the Registrar?
The following documents must be
presented to the Registrar for registration within seven (7) clear days of
the date of creation of the bill of sale:
(1) The original instrument
creating the bill of sale signed by the grantor, duly attested by a
credible witness and stamped with stamp duty;
(2) A Schedule or Inventory annexed
to the bill of sale or written thereon, containing a list and description
of the personal chattels comprised in the bill of sale [N.B. in the case
of a motor vehicle, the chassis number, engine number and vehicle model
must be stated];
(3) A sworn Affidavit of the
attesting witness who witnessed the execution of the Bill of Sale;
(4) A copy of the original bill of
sale verified by a Justice of the Peace as being a true copy of the bill
of sale referred in the affidavit of the witness who attested the
signature of the grantor on the Bill of Sale.
What happens to Bills of Sale after
they are lodged with the Registrar?
On receipt of the above documents,
the officer responsible for adjudicating the same does a formal
examination of these filed documents to ensure that they are:-
(1) filed within the statutory
period set out in Cap. 306 [7 clear days].
What is meant by "clear
days"? Section 39 (7) of the Interpretation Act, Cap. 1 states that
both the first day and the last day excluded from the computation of the
period. [N.B. If the Bill of Sale is dated the 6th day of the month, the
last day for filing will be the 14th of the month.]
(2) stamped in accordance with the
Stamp Duty Act, Cap. 91 [i.e. $6.00 per thousand dollars or $3.00 in every
five hundred dollars or part thereof.]
(3) signed by the grantor or
grantors.
(4) duly attested by the witness or
witnesses.
(5) submitted with the Schedule or
Inventory annexed. If the grantor is a company, the bill of sale must be
signed by one of the directors on behalf of the company and the company's
seal must be affixed next to the director's signature.
If the above requirements are met,
the bill of sale is then adjudicated and registered. The prescribed
particulars of the bills of sale are entered in the Register for Bills of
Sale, and indexed in an Index for Bills of Sale for search purposes.
