Whether you are buying or selling a horse, one of the best ways to avoid legal issues is to make sure you have a solid written agreement in place. It doesn’t matter if you’re dealing with a charming stranger or your Uncle Jim – never, ever should the sale of a horse be done on a handshake. Should issues arise, failing to have a written contract will likely lead to confusion and frustration for all involved.

So, what should a written contract include?  How can you tell a good contract from a bad contract?  For both buyers and sellers, there are several key ingredients:

Identify the Parties

            This may seem like common sense, but you’d be surprised by how often people fail to properly include this basic information. The name, address, phone number and other contact information for both seller and the buyer must obviously be set forth (making sure spelling is correct and addresses are current), but other involved parties should be identified as well. This include any brokers, agents, attorneys, etc. For instance, if the sale is made through an auction house, the information for both auction house and the owner should be included.  Also, if the horse being purchased has more than one owner, all owners should be identified and included in the sale. There have been cases where, after a sale, a co-owner of the horse not identified in the contract has successfully contested the sale. 

Identity of the Horse

            Again, this may seem like common sense. Still, there have been cases where buyers have been subject to bait and switch (i.e. the horse they bargained for was not the horse provided), and cases also where the seller alleged that the buyer took possession of the wrong horse. Litigation would have likely been avoided had the horse been properly identified. Identification should include not only the horse’s registered name, but also all other registration information, including age (foaling year), breed, color and markings.

Financial Information

This should include not only the actual sale price of the horse, but also any other incidentals or services included in the sale (i.e. vet treatments, medications, shoeing, tack, feed, etc.).  If a deposit was given, the credit given for the deposit must be clearly indicated. If payment is to be made in installments, the terms of those payments must be spelled out, including due dates, interest charged, penalties for late payment and recourse in case the buyer stops paying.  If a commission is included in the sale, the amount of the commission that has been (or will be) paid should be indicated, being sure to identify the person receiving the commission and the party responsible for paying it.

Any Conditions Relative to the Sale

            Some sales may have conditions attached.  For instance, a purchase may be contingent upon a vet check to verify the health of the horse, or the sale may include a trial period.  Any conditions must be spelled out within the contract in as much detail as possible to avoid any confusion or misinterpretation. This includes any particular understandings between the buyer and seller.  For instance, if a buyer is looking for a horse for a young, inexperienced rider and the seller guarantees the horse is suitable for that purpose, that guarantee should be set forth in the contract. 

Disclosure of Existing Defects

            Most standard contracts contain a clause that requires the Seller to disclose any existing defects known to him relative to the horse. Under normal circumstances, a buyer has the right to rely upon these disclosures.  For example, if a rider is buying a horse from a trusted trainer, the trainer has a legal duty to disclose everything he/she knows about the horse, such as habits in the show ring, bad barn behavior, etc.  Failure to do so may open the trainer/seller to liability.

Similarly, if the seller knows there is a misconception on the part of the buyer relative to the horse, it is the seller’s obligation to speak up. For instance, if the buyer tells the seller that he intends to have his young, inexperienced son ride the horse, but the seller knows that the horse is difficult to handle and not suitable for young or inexperienced riders, the seller must speak up, or he/she could be liable to the buyer not only for the sale, but also for injuries which might be suffered by the buyer’s son.  

The Law that Governs

            Most standard contracts include legal language concerning how and where disputes will be handled.  For instance, the language may state that the law of the state and county where the seller lives will apply, and the parties are required to submit the case to “binding arbitration.” It is important to pay attention to this language since it can affect your rights should a dispute arise. For instance, if you live in Elmer, New Jersey but purchased the horse from a seller based in Browning, Montana, the contract may specify that any disputes must be litigated in Glacier County, Montana.  This means that you might have to get a lawyer qualified to practice in Montana, and you may have to travel there to litigate the case.  The same contract may specify that, if a conflict arises, you must submit the case to binding arbitration.  This means that, instead of filing a civil action, you must present the case to an Arbitrator in the small town of Browning, Montana, and you will be bound by that Arbitrator’s decision.  You can likely see how this language could significantly affect your interests.

Signatures and Date

            Make sure all parties sign and date the contract. You might be shocked to learn how many contracts lose their effect because one party or the other failed to sign and did not include the date.  Also, make sure to get a copy of the signed document and keep it in a safe place. 

Ask Questions!

            As either a buyer or seller, there is no limit to the number of questions you could (and should) ask prior to a sale.  As a buyer, ask about issues such as the health history of the horse, any special care required, feeding preferences and schedule, any issues regarding transportation, behavior in the barn, trail and show ring, behavior around other horses, any particular quirks, breeding history and so forth. If the seller has only owned the horse for a short time, find out why he is selling and ask for the information regarding previous owners.  If he won’t give you this information, it might be wise to walk away since he may be trying to hide something.  

            As a seller, be sure to clarify the buyer’s expectations. Find out what the buyers’ purpose is for the horse, how and where they intend to board it, transport it, and so forth.  Make sure you disclose anything you know about the horse that may affect the intended purpose of the buyer, including any negative behavior, even if you personally don’t feel it exceeds the normally accepted hazardous or unpredictable behavior of a horse.  If the buyer is scared away by your honesty, don’t worry, there will be other buyers who will appreciate your openness.

            Mati Jarve is the managing partner of the Marlton, New Jersey law firm of Jarve Kaplan Granato, LLC. He is certified by the New Jersey Supreme Court as a Civil Trial Attorney and the National Board of Trial Attorneys as a Trial Advocate. Licensed in New Jersey, Pennsylvania and Arizona, he maintains a national practice in civil litigation, including equine related issues. This article is for informational purposes only and is not intended to be legal advice. If you have a specific legal question or problem you should consult with an experienced and knowledgeable equine law attorney. Questions, comments or suggestions can be e-mailed to mjarve@nj-triallawyers.com, by visiting www.nj-triallawyers.com.