How Good is Your Purchase Contract
Every week, Equine Legal Solutions receives numerous inquiries from dissatisfied horse purchasers who want to know what their rights are. 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 purchases and illustrations of how a detailed contract can help the purchaser.
Full Disclosure
Horse sellers often employ a “if they don’t ask, don’t tell” philosophy – if you don’t ask them the right question, you won’t get the right answer. They figure that if they tell, the horse won’t sell. Horse sales are generally “as is” with no warranty, unless you have a written agreement that states otherwise or unless the seller has made specific representations. In the vast majority of cases ELS sees, any specific representations that the seller has made were verbal and therefore extremely difficult to prove.
Each of ELS’ purchase agreements ask the seller to represent that the horse has no history of health, soundness or behavioral issues, except as the seller may write on the form. The “history” part is important – a horse that may be sound, healthy or well-behaved today, but may have previous issues that would impact his future performance. The agreement also asks the seller to represent that they believe the horse is suitable for the buyer’s specific intended use.
When a horse goes lame or develops a health condition, it is frequently difficult to prove that the condition was pre-existing, especially if a veterinarian did not detect the problem during a pre-purchase examination. Frequently, the seller’s veterinary records can help prove that a condition was pre-existing, but most states have laws that prohibit disclosing veterinary records to anyone other than the person who ordered the treatment. To address this problem, each of ELS’ purchase agreements have the seller represent that they have provided the buyer with a copy of all of the horse’s veterinary records. The agreement also has the seller provide consent for the buyer to obtain records from any veterinarian who has treated the horse during the time that the seller has owned it.
Do I Get My 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, often for very good reasons. However, the seller is often reluctant to refund the deposit. A good purchase contract must specify the circumstances under which the seller must refund your deposit and the circumstances under which the seller will get to keep your deposit.
If your purchase 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 you of the horse’s current health and soundness, and the decision on whether to pass on the horse is up to you. Therefore, many buyers and sellers argue about whether a horse has failed a vet check or not. ELS’ Purchase 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, thus avoiding any arguments about the outcome of the vet check.
Likewise, if your purchase 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 you decide that he’s unsuitable and want to return him? ELS’ purchase agreement spell out the conditions of the trial, down to who is responsible for returning the horse to the seller if the sale is not completed.
What if Something Happens to the Horse?
Your purchase 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’ purchase agreements specifically allocates the risks between the purchaser and the seller.
The Seller’s 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 purchase agreement should clearly spell out any right of return that you may have.
Venue: Where Can You Sue?
In the modern era of interstate and even international horse sales, your purchase contract should specify what state’s law will apply and where the parties must bring a claim. Otherwise, you may be forced to bring suit against a seller in a distant state or even a foreign country.
Here are some common problems with horse purchases and illustrations of how a detailed contract can help the purchaser.
Full Disclosure
Horse sellers often employ a “if they don’t ask, don’t tell” philosophy – if you don’t ask them the right question, you won’t get the right answer. They figure that if they tell, the horse won’t sell. Horse sales are generally “as is” with no warranty, unless you have a written agreement that states otherwise or unless the seller has made specific representations. In the vast majority of cases ELS sees, any specific representations that the seller has made were verbal and therefore extremely difficult to prove.
Each of ELS’ purchase agreements ask the seller to represent that the horse has no history of health, soundness or behavioral issues, except as the seller may write on the form. The “history” part is important – a horse that may be sound, healthy or well-behaved today, but may have previous issues that would impact his future performance. The agreement also asks the seller to represent that they believe the horse is suitable for the buyer’s specific intended use.
When a horse goes lame or develops a health condition, it is frequently difficult to prove that the condition was pre-existing, especially if a veterinarian did not detect the problem during a pre-purchase examination. Frequently, the seller’s veterinary records can help prove that a condition was pre-existing, but most states have laws that prohibit disclosing veterinary records to anyone other than the person who ordered the treatment. To address this problem, each of ELS’ purchase agreements have the seller represent that they have provided the buyer with a copy of all of the horse’s veterinary records. The agreement also has the seller provide consent for the buyer to obtain records from any veterinarian who has treated the horse during the time that the seller has owned it.
Do I Get My 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, often for very good reasons. However, the seller is often reluctant to refund the deposit. A good purchase contract must specify the circumstances under which the seller must refund your deposit and the circumstances under which the seller will get to keep your deposit.
If your purchase 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 you of the horse’s current health and soundness, and the decision on whether to pass on the horse is up to you. Therefore, many buyers and sellers argue about whether a horse has failed a vet check or not. ELS’ Purchase 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, thus avoiding any arguments about the outcome of the vet check.
Likewise, if your purchase 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 you decide that he’s unsuitable and want to return him? ELS’ purchase agreement spell out the conditions of the trial, down to who is responsible for returning the horse to the seller if the sale is not completed.
What if Something Happens to the Horse?
Your purchase 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’ purchase agreements specifically allocates the risks between the purchaser and the seller.
The Seller’s 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 purchase agreement should clearly spell out any right of return that you may have.
Venue: Where Can You Sue?
In the modern era of interstate and even international horse sales, your purchase contract should specify what state’s law will apply and where the parties must bring a claim. Otherwise, you may be forced to bring suit against a seller in a distant state or even a foreign country.