Reed Smith Client Alerts

In recent years, there has been a dramatic increase in the use of bills of sale, a somewhat antiquated form of security, in relation to individuals raising finance secured against a car they own: the logbook loan. This article discusses bills of sale and considers recent proposals for reform in this area.

作者: Claude Brown

You could be forgiven for thinking that the Bills of Sale Acts of 1878 and 1882 would have been repealed by now, or could never apply to you, over 130 years after they were drafted. But if you’ve ever purchased a second-hand car (or, if you’re lucky enough to be purchasing works of art or borrowing against your gold coins), you could be wrong.

Bills of sale may be granted by individuals or unincorporated businesses (such as partnerships) as a form of security in relation to moveable goods which the individual or unincorporated business sells, while retaining possession. This is a conditional bill of sale, whereby the borrower may continue to use the sold goods, unlike pawnbroking or pledging where the lender would take possession of the item in question. Hotels use bills of sale to secure financing against their furniture, and individuals or unincorporated businesses can use them to register a general assignment of their book debts.