The lawyer's view: managing risk when selling horses
Selling horses is almost uniquely risk laden from a litigation perspective. Traders of horses are tightly regulated by legislation which was not drafted specifically to account for the horses and their unpredictable ways.
The purchase of a horse often represents a significant emotional and financial investment for the buyer. For that reason, if something goes wrong after the purchase, a buyer will often be particularly motivated to pursue what they consider to be the seller’s wrongdoing.
Sales by Traders
Since 2015, the sale of any horse by a trader (i.e: a dealer) to a consumer (i.e: a hobby equestrian) in England and Wales has been regulated by The Consumer Rights Act. If you are selling horses with a view to making a profit, then you are likely to be deemed as a trader by the Court.
This is a far-reaching piece of legislation providing consumers with enhanced protection. It states that any horse sold to a consumer must be:-
a) of satisfactory quality
b) fit for its intended purpose
c) as described
If the horse does not meet with any of these requirements, then the seller is required to offer a refund (if the buyer rejects the horse within 30 days of receiving it) or a replacement or repair, or if they are not possible, a refund (if the horse is rejected more than 30 days after the buyer has received it). The requirements of the Act are somewhat vague and open to interpretation.
There is no way for a trader to avoid these requirements. A trader can protect themselves by a) knowing the exceptions contained in the law and b) creating enough documentary evidence to rely on if a claim or dispute arises.
The law provides that a horse which does not conform to the requirements within 6 months from the time of the sale will be treated as not conforming on the day that the sale was made. This is obviously a very difficult piece of law for traders to deal with. It is very difficult to predict what will happen to a horse in the 6 months after it has left their care. However, this assumption can be rebutted (reversed) if the trader can prove that the horse did conform on the day that the contract was made (for example, by way video evidence).
It is clear that the Act is strict and could create an unreasonably high burden on a trader. Thankfully for traders, there are some exceptions. A horse will not be deemed as “unsatisfactory” even if it does have a defect, if the defect:-
a) was specifically drawn to the buyer’s attention before the agreement was made (for example, where an advert discloses that a horse is not a novice ride, and the buyer subsequently complains that the horse has acted in a naughty manner);
b) where the buyer has examined the horse before the purchase and that examination ought to have revealed the defect (for example, where a horse has a large splint which should have been visible to a buyer).
Sales by Private Individuals
The Consumer Rights Act does not apply to sales of horses between two private individuals. However, private sellers of horses may still be held liable for issues arising after the sale, if they have made a misrepresentation to the buyer. A misrepresentation occurs when a seller has made a statement to the buyer about the horse which they knew, or ought reasonably to have known, was not true or may not have been true. If the buyer has relied on such a statement in buying the horse, then they may be entitled to rescind (cancel) the contract for the sale of the horse.
We set out below some practical tips for those who are selling horses.
Advertisements are often cited when a buyer wishes to establish that a horse is not as described by a trader. There is a delicate balance to be struck between attracting a buyer, and creating a document which could form the basis of a dispute.
Take care not to “oversell” the horse. Try to use only statements which you can keep factual evidence of, for example, competition results. Don’t use sweeping generalisations.
Expressly disclose quirks or habits. This may put buyers off, but it is better to lose a buyer than be involved in litigation with them.
Using a Contract
Where a sale involves either a high value horse, an unusual term (such as deferred payment), an international element or a horse with any health issues or quirks, it is highly advisable to use a contract. Off the shelf contracts will rarely provide the protection which each unique transaction calls for.
Examples of a few key issues which should be considered in any contract for the sale of a horse include:-
The buyer should agree that they do not rely on any oral statements made by the seller in deciding whether they will purchase the horse. Buyers will often say that a seller have told them something at a viewing. The seller may not have thought to be a binding statement at the time, but it could be used against them during a dispute. Worse still, the parties may have different recollections about what was said verbally.
The buyer should disclose in the contract known (current or historical) health issues, temperament issues, quirks or other requirements of the horse.
The buyer should confirm what the exact intended purpose for the horse is, to avoid a buyer buying a “happy hacker” and later complaining that it is not suitable for competition.
These are provided by way of examples only and are not exhaustive. You should contact a solicitor to seek advice about the preparation of a contract of sale.
Sellers should keep (in permanent form- we recommended backing up electronically) evidence relating to the horse during their ownership. This may include:-
· Videos of the horse being ridden
· Photographs of the horse
· Any veterinary reports held by the seller
· Any communications between the seller and the buyer
· Any advertisement of the horse
· A photograph of the previous owners of the horse in its passport (in case the seller needs to make contact with them)
Hannah Bradley is a Solicitor at The Equine Law Firm