What Is the Difference Between a Bill of Sale & a Sales Agreement?

by Osmond Vitez; Updated September 26, 2017

Many types of transactions exist in the business environment. The most common is a transaction where a buyer transfers ownership of an item to another party, either permanently of for a specified time. A bill of sale and sales agreement both pertain to these transactions.

Defined

A bill of sale is an official document that transfers ownership of an item from a seller to the buyer. Buyers will use the document as a historical record to prove their ownership. A sales agreement provides for a future purchase of goods or service with specific terms described in the document.

Purpose

A sales agreement secures economic resources for a company without the need to immediately purchase the items. A bill of sale occurs after the parties execute the sales agreement.

Considerations

Sales agreements tend to give each party a degree of flexibility before entering into a contract. Most of these agreements are for major acquisitions, and ensure one party does not compromise the agreement when completing the sale. A bill of sale does not have this flexibility.