How Good Is Your Equine Sale Contract

Every week, Equine Legal Solutions receives numerous inquiries from dissatisfied horse purchasers who want to sue a horse seller.  Inquiries range from situations of plain old-fashioned buyer’s remorse to outright fraud committed by the seller. When ELS reviews the situation, we usually find that the buyer and seller did not have a written contract.  In other cases, there was a written contract, but it was poorly written and not detailed enough.

Here are some common problems with horse sales and illustrations of how a detailed contract can help the seller.

Full Disclosure

If you know about any past or present issue with a horse, put it in writing in the sale contract.  That way, it will be very difficult for the buyer to come back later and claim that you did not tell them.

Disclaim All Warranties

Even though horse sales are generally “as is” with no warranty, a dissatisfied buyer will usually allege that you made specific representations about the horse, and that they relied on those representations.  To avoid arguing about whether email and telephone conversations constituted part of the terms of the deal, a good sale agreement should disclaim all warranties and clearly state that the sale is “as is.”

Do You Have to Give the Deposit Back? 

Frequently, horse purchasers put down a deposit intended to show their intent to purchase the horse.  Payment of the remainder of the purchase price is frequently conditioned upon the outcome of a prepurchase veterinary exam or a trial period.  In many cases, the purchaser decides not to complete the purchase.  However, you may not want to refund the deposit, because you may feel that the buyer is rejecting the horse for reasons other than those you mutually agreed upon.  A good purchase contract must specify the circumstances under which you must refund the deposit and the circumstances under which you will get to keep the deposit.

If the sale is contingent upon the outcome of a vet check, your agreement should be very specific about what that means.  Most veterinarians will not “pass” or “fail” a horse during a prepurchase exam – they simply inform the buyer of the horse’s current health and soundness, and the decision on whether to pass on the horse is up to the buyer.  Therefore, many buyers and sellers argue about whether a horse has failed a vet check or not.  ELS’ Sale Agreement Subject to Vet Check specifies that the buyer can choose whether or not to purchase the horse within a certain amount of time following the vet check, but that they agree to provide you with a copy of the vet’s examination records.  Otherwise, you may not have legal access to those records, even though you are the horse owner.

Likewise, if your sale is contingent upon the outcome of a trial period, your agreement should be very specific about the terms of the trial, particularly the allocation of risk.  What happens if the horse goes lame during the trial period, or the buyer decides that he’s unsuitable and wants to return him?  ELS’ sale agreements spell out the conditions of the trial, down to who is responsible for returning the horse if the sale is not completed.

What if Something Happens to the Horse?

Your sale agreement should clearly state who bears the risk of loss of or damage to the horse, particularly when the sale is not a one-day cash and carry transaction.  Each of ELS’ sale agreements specifically allocates the risks between the purchaser and the seller.

Your Return Policy

Although accepting a return on a horse sale is fairly rare, some horse sellers do offer a right of return.  That right is typically very limited and may involve the buyer accepting another horse from the seller rather than a cash refund.  Your sale agreement should clearly spell out any right of return that you may offer.

Venue: Where Can You Be Sued?

In the modern era of interstate and even international horse sales, your sale contract should specify what state’s law will apply and where the parties must bring a claim.  Otherwise, you may be forced to defend a lawsuit in a distant state or even a foreign country.