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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41221
Experience:  Run my own successful business/contract law practice.
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Is a bill of sale still legally binding if no goods or money

Customer Question

Is a bill of sale still legally binding if no goods or money exchanged hands?
One of the parties involved wants to back out, prior to exchanging goods or money.
Submitted: 2 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 2 years ago.
Thank you for your question. Please permit me to assist you with your concerns.
A bill of sale is still legally binding even if no goods or money exchanged hands, so long as the bill of sale states that this exchange occurs later. For example if the agreement states that the parties sign this on the 29th but the transfer will occur on the 1st of next month, the agreement is still valid and binding. It would be a void bill of sale if the agreement stated that the goods were transferred and received, as that did not yet take place.
Dimitry, Esq.
Customer: replied 2 years ago.
What are the ramifications for breaking a bill of sale, prior to exchanging goods or money? Technically nobody lost anything or had anything invested in it prior to goods or money being exchanged.
Expert:  Dimitry K., Esq. replied 2 years ago.
The ramification is that it would be a breach of contract. If the other party due to this breach obtained foreseeable damages, they can sue for those costs, or for additional costs if the goods can be replaced. For example if this bill of sale was for 10,000 units at $4 a unit, and the party could only obtain similar units at $5 a unit, the $1 per unit can be attributed to the breaching party, and that party can be sued for those costs. Or the party can sue for 'specific performance', which is essentially a court order that they perform the contract as stated.
Dimitry, Esq.