Is it legal to write a bill of sale for less than the purchase price and supplement the rest with cash.

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Is it legal to write a bill of sale for less than the purchase price and supplement the rest with cash.

The buyer for our car wants us to write a bill of sale for a $1000 less than the sell price and give us $1000 cash for the balance. Is this legal to do so?

Asked on May 6, 2012 under Business Law, Texas

Answers:

B.H.F., Member, Texas State Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

In informal transactions, people sometimes "fudge" on the documentation for bills of sale, and nothing ever happens because of the informality of the transaction.  But technically, yes, it is illegal.  A bill of sale is commercial instrument which documents the transfer of ownership from the seller to the buyer.  Even though the chances are relatively slim that anything will happen on the criminal side, you still consider against altering the bill of sale for two reasons.  First, the buyer probably wants a lower purchase price because he thinks that it will lower his expense when he goes to transfer the title.... he is mistaken-- they will use the blue book value, not the purchase value.  Editing the form with intent to defaud the government, could result in a criminal charge.  Remember "Murphy's Law."  The second reason is contractual.  When you sign the bill of sale for $1000.00-- it represents the contract between you and the buyer.  He could potentially claim that he overpaid a $1000.00 and demand ther return of the $1000.00--- and you're only defense would be that you falsified the document-- which is not a legally sound position to be in.  Best practice is just to have the document reflect the truth of the agreement.  Considering the potential collateral consequences, tell the buyer the agreement is what the agreement is--$2000.00. 


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