Let’s be honest, documentation can be confusing, especially when there are similarities between the different types — as there often are!
Knowing what separates similar documents is crucial, and you don’t want to make any mistakes.
With that in mind, let’s examine the differences between a buyer’s order vs. a bill of sale.
What is a buyer’s order or purchase order?
A buyer’s order (also known as a purchase order) is a legally binding document between two parties (the buyer and the seller).
It acts as a contract between them and usually contains the following details.
- Product details.
- Product quantities.
- Cost (per unit and total) if multiple quantities.
- Due delivery date.
- Any payment terms (total to be paid on delivery, deposit required, etc.)
What is a buyer’s order for a car?
While very similar to other buyer’s orders, a purchase order is slightly more complicated when it comes to a car.
With a car, a buyer’s order will list all the details of what you are getting and any financing involved.
It is legally binding and thus provides some ‘insurance’ to the car dealership.
The details you would expect to see on a buyer’s order for a car include:
- The agreed total price.
- The deposit required.
- Financing arrangements (including details such as interest).
- The vehicle identification number (VIN)
- The car’s make, year, and model.
- Any relevant additional fees and costs.
The importance of a vehicle purchase agreement
Buying a car can be complicated and involve many different factors and costs.
A vehicle purchase agreement, or vehicle purchase order, provides a single point of reference that lists all those factors and costs.
It means that the dealership has a legally binding contract if the buyer reneges on the purchase.
It operates as the primary and central document in the sales process and will set out all the elements agreed upon between the dealership and the buyer.
It is critical to both parties. A vehicle purchase agreement will almost always refer to the purchase of a new car.
What is a bill of sale?
A bill of sale is a document that records the details of a sale of a product (or a transfer of those products/goods) between two parties.
It can act as legal proof that the seller no longer has any right to that product, and any rights now reside with the purchaser.
Depending on the goods and the details of the sale/transfer, a bill of sale can be relatively simple or quite complex.
Many people ask, who keeps a bill of sale? The simple answer is that both parties should retain a copy as it provides evidence of the transaction in case of any disputes.
How does a bill of sale work?
Bills of sale can be very simple; even a receipt from your supermarket is a bill of sale acknowledging that you have paid for the goods you’re walking out of the store with.
They generally act as documents that provide evidence you have paid a certain amount for particular goods or services.
Depending on commerce laws in your state, you may want to include different information (though the basics remain the same).
Using templates such as ‘bill of sale templates Ohio’ can help you save time and ensure you meet any regulatory requirements.
Generally speaking, a bill of sale will fall into one of two categories:
1. Absolute bill of sale
While this type does not represent any form of security, it does evidence the transaction that has taken place and proves that the ownership of any goods (or services) has been transferred from the seller to the buyer.
In essence, it is simply a contract that covers the sale of goods or services.
2. Conditional bill of sale
With a conditional bill of sale, there’s an element of security involved as this type represents a transfer of personal assets to someone as security for the payment of money.
With this type, the party who holds the security has the right to claim the assets if the conditions listed are not met.
The key difference between a bill of sale and a buyer’s order
The key difference between a bill of sale and a buyer’s order is that the former acts as proof of a transaction that has already taken place.
Meanwhile, the latter acts as a legally binding contract between purchaser and buyer for goods or services that may be provided at that point or on an agreed future date.
The bill of sale can list what you have already bought.
The purchase order lists not only what you will buy but also any specific conditions such as financing arrangements, deposits, date of delivery, and so on.
The buyer’s order should itemize any relevant conditions and costs.
As it is legally binding, either party can use it as evidence in the event that the contractual conditions aren’t fully met.
Protect big transactions with buyer’s orders or bills of sale
Whichever type you are using, buyer’s orders and bills of sale can help fulfill legal requirements and offer legal protection to both parties.
In the case of bills of sale, the involved parties can be protected by any relevant state and federal consumer laws.
And using PandaDoc templates such as ‘Bill of sale templates South Carolina’ means it is a simple process.
Because both documents can be complicated, and need to meet the legal requirements of the state (or states) where you do business, using templates can help prevent costly errors.
You must be 100% sure that any document you use in your business is accurate and meets your and your customers’ needs.
Whether you need a purchase order template or one for a bill of sale, PandaDoc have got you covered.
Not only do PandaDoc templates save you time, they intuitively guide you through any process so that your documents are always accurate.