Legal
LET’S MAKE A DEAL
Purchasing a horse
by Catherine E.
Willson, B.A., Ll.B.
52 | WHOA! Fall 2011
Purchasing a horse is usually a big money item.
Often a horse is more expensive than a car but
historically, no paper changes hands, just the
horse. No matter how honest or professional
or knowledgeable the seller appears to be at
the time of purchase, you must paper the deal.
Finding and purchasing a good horse is one
third experience, one third art, and one third
luck. Everyone wants the deal to be successful
but when it is not and there is a problem with
the horse, very few people will be willing to
accept responsibility. A sale agreement can
go a very long way to resolving disputes and
ensuring that problems are addressed fairly.
I have listed below three common examples
of problems arising after the sale of a horse.
Each is slightly different and would be treated
differently in a court of law. In cases where
statements made by the seller about the
horse later prove to be untrue, the buyer may
have recourse against the seller and in some
cases, will be permitted to get his money back.
Statements made by the seller describing
the horse can usually be divided into two
categories: warranties and conditions.
Example 1 - Warranties:
A woman is seeking an experienced show jumper
to train and show. She finds a horse that is suitable
and sound. She purchases the horse and prepares
for the show season. The papers for the horse arrive
one month after purchase and indicate that the
horse is 12 years old. She was told that the horse
was 9 years old on purchase. She is concerned that
the resale value of the horse will be significantly
compromised because of the horse’s age. She had
assumed that she would sell the horse at its peak in
a couple of years. She did not inform the vendor of
this intention at the time of sale.
Result: The purchaser would have to keep the
horse and sue for damages. Where the seller
has misrepresented a fact about the horse
that is not fundamental to the sale agreement,
the seller has breached a warranty of the sale
agreement. Warranties are statements that
are collateral to the main purpose of the sale
agreement and therefore, of less significance to
the sale than a representation of, for example,
soundness of the animal.
T he purc h aser woul d b e entitle d to
obtain damages against the vendor for the
Legal
misrepresentation. The amount of damages
would be linked to the difference between the
price she paid for the horse and its actual value
at its true age. Breach of a warranty entitles a
purchaser to damages only.
Example 2 – Conditions of Sale:
A family is purchasing a horse for their teenager
to ride as a hunter/jumper. Their trainer asks
the vendor about the horse’s history including
any issues regarding soundness or illness.
The vendor indicates that the horse has
always been sound and well. Shortly after
purchase, the animal starts to go slightly
lame on the right front. A veterinarian is
called in to examine the horse. Through
a c o in c i d e n c e, t he s a m e vete r in a r i a n
examined the horse for the vendor one year
earlier and diagnosed the horse with early
navicular disease. The veterinarian confirms
this diagnosis with the purchasers. The
horse will never be sufficiently sound to act
as a hunter/jumper.
Result: The purchasers are most likely entitled
to return the horse to the vendor in exchange
for the purchase price plus any other damages
suffered by the purchasers. A statement made
by a seller about a horse that goes to the root
of the sale contract is called a condition of the
sale. A condition must relate to a quality of
the horse that is of fundamental importance to
the buyer and without which, the buyer would
never have purchased the horse. Soundness is
an obvious condition of sale. No purchaser would
purchase a horse that is known to be unsound.
As a simple test, ask yourself whether you
would have bought the horse if you had known
the statement made by the seller was untrue at
the time of purchase. If the answer is "No", the
statement is a condition of the sale.
Where a seller has misrepresented a condition
of the sale agreement, the buyer is usually
entitled to rescission. This is best described as
an attempt to place the parties back in their
original positions as if the sale had not taken
place. The buyer is entitled to return the horse
to the seller in exchange for the money paid
plus any costs incurred by the buyer for board,
blacksmith’s fees, veterinary costs, etc., relating
to the reasonable care of the horse.
Consider the difficult position of the
veterinarian: would the vet be able to disclose
the previous diagnosis to the current purchaser
without breaching her duties of confidentiality
to the vendor?
Example 3 – Implied Conditions of Sale:
A family wants to buy a first pony for their
young son. They do not know much about
horses and are reliant on the son’s horse
riding instructor to help them pick a pony.
The instructor actually runs quite a busy barn
and buys and sells horses on a regular basis.
She sells them one of her ponies. After a
week, it becomes apparent that the pony is
too much for the boy. It has run away with
him twice and now he is afraid to ride it.
With other more experienced youngsters,
the pony has always behaved well. The
parents want their money back.
Result: The pony is sound and well. It is just
too much pony for this boy. In this instance,
the riding instructor is caught by the Sale of
Goods Act. Where the buyer, expressly or
by implication, makes known to the seller
the particular purpose for which the goods
(horse) are required so as to show that the
buyer relies on the seller’s skill or judgment,
and the goods are of a description that it is
in the seller’s business to supply, there is an
implied condition that the goods (horse) will
be reasonably fit for such purpose.
In this case, the riding instructor knew what
the boy needed. The pony that she supplied was
not fit for this purpose. As a result of this breach
of a condition of sale, the purchasers are entitled
to rescission meaning the return of the horse for
the purchase price paid.
Protect Yourself With a Written Contract
When buying a horse, it is best not to rely
on the remedies listed above. The most
important advice I can give you is to put
the deal in writing. As a basic rule, the sale
contract should be signed by both the seller
and the buyer and witnessed. As a buyer,
anything you consider important about the
horse and its purchase should be written into
the sale contract. If an important fact is not in
the sale contract and the seller later denies it,
you will have difficulty proving it in Court.
The following points can be included in a
sale agreement:
1. t h e n a m e s o f t h e p a r t i e s t o t h e
agreement, their descriptions as seller
and buyer, and their addresses;
2. a description of the horse;
3. the price and payment terms;
4. the date and place of delivery;
5. conditions of the contract (soundness,
suitability of the horse for a specific
p u r p o s e, f re e d o m f ro m v i c e, etc .,
whatever is important to you); and
6. any thing else that is included in the
sale such as tack, papers, passpor t,
vaccination certificate, etc.
The sale agreement can be very simple
and no longer than a page. Depending on the
value of the horse, it may be much longer
and detailed. It is up to you – just put it in
writing. An ounce of prevention! _
Catherine Willson is a founding partner at Willson
Lewis LLP in Toronto, Ontario, with expertise in
Equine law. The legal information provided in this
article is based on the laws of Ontario. If you find
yourself in a situation to which this article may
apply, please consult a lawyer before acting or
relying on any of the statements made herein.
Readers may also contact cwillson@willsonlewis.
com to discuss any specific issues they may have
or visit their website at www.willsonlewis.com.
www.horse.on.ca | 53