About Me

My photo
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.

Thursday, May 31, 2007

Suurrrre We'll Take the Horse Back...

One of our callers today found themselves in a type of horse purchase dispute that arises fairly often in our equine law practice: buyer buys horse, is dissatisfied and seller agrees to resell horse, buyer is then unhappy with the resale process.

In this case, the buyer had ridden the horse prior to purchase and took a lesson from the seller (who was a trainer) on the horse prior to purchase. At the time of the buyer's rides, the buyer reported that the horse was calm and manageable. When the buyer got the horse home, the horse took off with the buyer and was too hot and spooky for the buyer to handle. The buyer contacted the seller, who agreed to take the horse back.

However, when the buyer arrived at the seller's property with the horse and asked for a refund, the seller stated that the horse was still the buyer's, but that the seller would try to sell it for the buyer. The buyer agreed (reluctantly) and left the horse there. Four months later, the seller still has the horse, the papers and the buyer's money. When the buyer threatened legal action, the seller retorted that they would counterclaim for boarding, training and other expenses.

Here, the parties have both set themselves up for a dispute. Other than trying out the horse before buying, the buyer did not do anything to protect themselves:
  • No written purchase agreement of any kind
  • No prepurchase vet exam. (If the buyer had had a prepurchase vet exam during which blood was drawn and kept on file, they could now test that blood for the presence of tranquilizers. If the buyer can prove the horse was drugged at the time of sale, the buyer would have a valid legal claim for fraud or misrepresentation and could seek rescission of the original sale contract.)
  • No trainer or instructor evaluation of the horse's suitability for the buyer (a must for any novice horse buyer)
  • No prepurchase trial. (Granted, the seller may not have agreed to this, but it would have been advisable to ask.)
The buyer and seller both contributed to the dispute by not agreeing on the terms of the resale at the time the buyer dropped off the horse. Without that written agreement, the seller will have to prove that they are entitled to a sale commission, board, training and other expenses (and if the seller successfully proves those claims, the buyer will owe the seller). There are also practically no limits on how long the seller can take to sell the horse and how diligent the seller must be in marketing the horse, so it could ultimately cost more in board, training and other expenses than the buyer originally paid for the horse. If the buyer gets frustrated with the situation and goes to pick the horse up and have someone else sell it for them, the seller may claim an agister's lien and refuse to allow the horse to leave the property until the buyer pays the seller's board and training.

Returning a horse to the seller rarely works out in the buyer's favor. If the seller offers to exchange the horse for another, the buyer is limited to the choices that the seller has available. Consigning the horse to the seller and having them resell that horse is also disadvantageous for the buyer. Typically, the seller charges board and training for the time period they have the horse, usually $500-1200/month, resulting in the seller having little incentive to sell the horse. Plus, the seller will usually charge at least a 10% commission on the sale, leaving the buyer with less than their original purchase price.

At the end of this situation, it is likely that both parties will be unhappy with the results and both will lose money.

Buyers: protect yourself by thoroughly checking out the horse before buying, have a prepurchase vet exam and get the terms of the sale in writing. Sellers: encourage buyers to be certain about their purchase by having a written sale agreement specifying that all sales are final and that horses are purchased on an "as is" basis with no warranties. If you do accept a horse to resell on consignment, put the terms in writing so that no one is surprised.

No comments: