About Me

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Rachel Kosmal McCart is a lifelong horsewoman and the founder of Equine Legal Solutions, PC, an equine law firm based in the Portland, Oregon area. Rachel is a member of the New York, California, Oregon and Washington State bars and is admitted to practice before the U.S. District Court for the District of Oregon and the U.S. District Court for the Central District of California. Rachel currently competes in three-day eventing.

Wednesday, May 30, 2007

The Surprise Foal - Bonus or Boat Anchor?

Spring has finally arrived here in the Pacific Northwest and with the arrival of spring comes a flood of inquiries to our practice about "surprise" foals. Typically, an unsuspecting purchaser has bought a mare without knowing she is in foal. Sometimes, the mare owner doesn't even suspect pregnancy until WOW!! one morning the mare is not alone...

The arrival of a foal is not always cause for celebration. Usually, the mare owner had plans for the mare that didn't include time out for foaling. Often, these plans are time-sensitive, such as futurities. Sometimes, the mare is very young and the owner is justifiably concerned that pregnancy and lactation will stunt the mare's growth. The mare owner incurs unexpected expenses, such as vet fees, supplements and extra feed, sometimes far in excess of the original purchase price of the mare. With the average market value of a grade weanling being just a few hundred dollars, the mare owner is unlikely to recoup his or her expenses by selling the foal at weaning time.

When the mare owner calls the seller, the seller's reaction varies, but interestingly, they are rarely surprised or apologetic. Often, the seller views the foal as a "bonus," and takes the position that the mare owner should be (financially) grateful for this unexpected surprise. Sometimes, the seller has the chutzpah to ask the mare owner for stud fees! Occasionally, the seller even claims that the foal is their property and that the mare owner should care for the foal until weaning (at the mare owner's expense, of course) and then turn it over to the seller.

Does the mare owner have any recourse against the seller? If the seller knew or had reason to know that the mare was pregnant and failed to disclose that fact to the buyer, the seller has a claim that the seller materially misrepresented the mare (or even committed fraud). The buyer can seek rescission, which means that the contract is void and the parties are each returned to their original pre-sale position (seller gets mare and foal, reimburses buyer for buyer's expenses). Alternatively, the buyer can seek damages (i.e., the additional expenses they have incurred in connection with the pregnancy and foaling). In the rare instance where the seller had no reason to know that the mare was pregnant and neither did the buyer, either party may seek rescission based upon a doctrine known as "mutual mistake."

Who owns the foal? In most cases, unless the original purchase contract for the mare is rescinded, the buyer will own the foal.

Does the buyer have to pay stud fees to anyone? Typically, no. In most cases, the buyer has no contract with the stallion owner (whether it is the seller or a third party) to breed the mare and pay stud fees. However, unless the seller fulfilled his or her obligations under the breeding contract (e.g., paying the stud fees and informing the stallion owner that the mare is in foal), the stallion owner is not legally obligated to file a breeding report with the appropriate breed registry for the breeding. Without a breeding report on file at the breed association that includes the mare, the foal will generally not be eligible for registration. What that means is that it may be in the mare owner's best interest to negotiate with the stallion owner to get the foal registered, as registered foals are typically worth far more than grade foals.

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