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Above the Bar

Above the Bar Purchase and Sale Written Agreements

by Sean Hogan, Esq.

This article is for educational purposes only, so as to give the reader a general understanding of the law— not to provide specific legal advice. No attorney-client relationship exists between the reader and the author of this article. This article should not be used as a substitute for competent legal advice from a licensed professional attorney.

Perhaps one of the most common situations in which horse enthusiasts will find themselves involved, is the

sale or purchase of a horse. Unfortunately, when either a seller or buyer enters into this type of transaction unprepared, it can often lead to one party to the transaction being aggrieved and, as a result, lead to litigation. Connecticut courts have a history of hearing cases involving the sales of horses. Consider the facts of the following three cases, all of which arose out of the sale or purchase of a horse.

In Bartholomew v. Bushnell, 20 Conn. 271, the seller sold two horses to the buyer, which were alleged that he warranted to be “sound and good.” In fact, unknown to the buyer at the time of the purchase, the horses were blind in both eyes. Subsequent to learning that the horses were blind and thus unsound, the buyer commenced a lawsuit against the seller for breach of warranty.

Similarly, in Chadsey v. Greene, 24 Conn. 562, the matter brought before the court arose when a buyer, who was unfa-

miliar with horses, sued the seller of a horse based upon the representations made by the seller’s agent. The seller was known to be a man of questionable character and he referred the buyer to his agent. The agent told the buyer that the seller was a “highly respectable man . . . who had traveled to New York to buy a nice horse or two.” The buyer, relying on this statement, then purchased “one bay horse, seven years old and warranted sound, blanket and halter included.” However, the horse turned out to be lame, and the buyer sued the seller based

Yes, ma’am, you can put the whole family on his back!

But, your ad said he was a “family horse.”

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upon the representations made to him, which induced him to buy the horse.

More recently, in the matter of Raudat v. Leary, 88 Conn. App. 44, the Court heard a matter where the seller had placed an ad for the sale of a horse which stated, “registered Appaloosa gelding 15.3 hands, green broke, six years old, excellent ground manners, ties, clips, trailers. Needs miles. $3,200 negotiable.” Upon seeing the advertisement, the buyer contacted seller, who referred to the horse as “green broke and needed some miles.” Unbeknownst to the buyer, the horse had a propensity to buck, and the buyer and her trainer were bucked off on several occasions. Subsequently, the buyer sued the seller, alleging that the seller failed to disclose a material fact regarding the horse bucking.

I would suspect that a reader of this article has heard of someone or knows someone who found themselves in a situation similar to the buyers and sellers in the cases above. I would like to offer four principles to consider when entering into the purchase or sale of a horse: Trial period and pre-purchase examination; written agreements; warranty and disclosure; and caveat emptor.

Trial Period and Pre-Purchase Examination

As a buyer, you may be able to negotiate with the seller a trial period wherein you may keep and exercise the horse at your farm for a brief period of time prior to the execution of a sales agreement.

As we all know, horses react to various stimulations in the environment around them. The trial period allows the potential buyer to bring the horse to its presumptive new home and to test-drive the horse in the environment where it will be used. This is extremely beneficial to the buyer because they will be able to experience the horse being tacked up, washed, and loaded on and off a trailer.

The more you can learn about the horse prior to the purchase, the better. However, a seller may be reluctant to give a trial period, as removing the horse from the seller’s custody and control is not without its risks (i.e., the horse could be injured or worse while in the custody of a potential buyer).

Should the parties to the sale consider a trial period, they should execute a clearly written agreement detailing the terms of the trial period, including the amount of time, deposit (if any), where the horse will be stabled, who will be responsible for expenses (such as shoeing, veterinary care, etc.), for what purposes the horse may be removed from the stable during the trial period (i.e., horse showing), and insurance coverage that the potential buyer will carry on the horse while it’s in their care.

Related to the trial period is the veterinary pre-purchase examination (PPE). When having a PPE done, it’s important for the buyer to speak with their veterinarian and let them know what the intended use of the horse will be (hunter, eventer, reiner, etc.) so the veterinarian can take it into consideration during the exam.

Also, if practical, the buyer should attend the PPE and ask questions and observe the horse — this is another opportunity to see how the horse will act once in your care. Although some buyers will take the word of a seller as to the soundness and/or general health of a horse so as to avoid the additional expense of a PPE, situations like those in the Bartholomew and Chadsey cases could have been avoided had the horses been inspected prior to the purchase.

Written Agreements

Once the buyer and seller come to terms regarding the sale or purchase of the horse, having a written sales agreement and bill of sale can help to eliminate any misunderstanding that could exist between the parties.

The sales contract should, at the minimum, detail the parties to the sale (and if an agent was used, as was in the Chadsey case, the name of the agent — this is often a trainer); the price sold,

including payment information (i.e., check or wire details, never pay in cash); commissions paid and to whom; a detailed description of the horse, including sex, breed, height, markings, branding or tattoo, and USEF or association registration numbers; warranties made by either party (including that the horse is free of any lien and that the seller has the authority to sell and that the buyer has the authority to buy the horse) and, finally, the agreement should be signed by both parties.

Warranty and Disclosure

As we saw in the three cases listed earlier, all of the buyers found themselves in a situation where a dispute arose regarding the representations and warranties allegedly made by the seller. Buyers will want to discuss with the seller their intended use of the horse and ask the seller for a written warranty that the horse is fit for its particular use (i.e., use as an adult amateur hunter).

Similarly, a seller should disclose to the buyer any and all information known about the horse, and not hide anything just to induce a buyer to complete the purchase. In the event a seller were to warrant a false trait or character of the horse so as to induce the buyer to complete the purchase, an aggrieved buyer would have a cause of action against the seller for breach of warranty.

Often a horse will be listed for sale “as is” and a seller will attempt to limit any potential liability through the use of a disclaimer. However, buyers should be aware that, in a situation where a purchased horse does not conform to the sales agreement—which may contain a disclaimer, there may not be available an action based upon breach of warranty. However, there still may exist grounds to pursue a cause of action based upon fraud, should the buyer be able to show that the seller knew the warranty to be false, but still made same so as to induce the buyer to purchase. Caveat Emptor

Caveat emptor is a Latin term for “buyer beware.” As a buyer of a horse, if something appears too good to be true, it may be, and a buyer should proceed with reasonable due diligence before agreeing to purchase a horse.

The State of Connecticut has statutes meant to assist consumers, including the buyers of horses, from unfair and deceptive trade practices and advertising. Further, if you are the buyer of a horse and you feel that the horse you received is not the horse that you bargained for, you may wish to consult an attorney to discuss your rights regarding any claims against the seller for breach of contract, breach of warranty, fraud, and/or misrepresentation.

The sale or purchase of a horse, regardless of sales price, is not a transaction to enter into lightly. However, with proper planning and due diligence, buyers and sellers can ensure that the transaction proceeds without issue and, with consideration of the preceding principles, limit or avoid potential liability.y

Sean T. Hogan is an attorney in Westport, where his practice focuses on estate planning and assisting trainers, owners, and investors in equine-related transactions and litigation in Connecticut, New York, and before the USEF. He’s a governor of the Fairfield County Hunt Club and co-chairs the Fairfield County Hunt Club June Benefit Horse Show.

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