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.

The following formalities should be observed in respect of bills of sale:-

1. 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;
2. 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;
3. 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;

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.

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.

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.