Bill of Sale - The Conditional Bill of Sale

The Conditional Bill of Sale

The conditional bill of sale refers to any assignment or transfer of personal chattels to a person by way of security for the payment of money. The conditional bill of sale creates a security in favour of the grantee of the bill whereby the grantee is given personal right of seizure giving right to a security interest of a possessory nature.

There are other forms of security over goods such as a pledge and contractual lien which also only give right to a security interest of a possessory nature.

An example of a conditional bill of sale can be found where a creditor gives a loan and has transferred to himself, as collateral or security for the loan, the title of the goods or other personal property of the debtor. The physical goods or other property however remains with the debtor.

In recent times, bills of sale secured against debtors vehicles (also known as "logbook loans") have gained notoriety in the United Kingdom due to their often very high interest rates and potentially unfair terms and conditions. In December 2009, the UK government announced plans to consult on whether to outlaw logbook loans.