Joe Jones is buying a pony for his young daughter. He’s looking for a gentle animal who’ll be easy to handle. He finds the perfect pony who seems to have a great temperament. The seller assures him it is as docile as a lamb. He signs the papers, hands over the money, and takes the pony home. Two days later, the pony is so rank that Joe can’t even get a saddle on it, let alone allow his daughter to ride it. When Joe complains, the seller says the sale is final and the pony was sold “as is.” Is Joe stuck with a bad pony? Does he have any recourse?

In our previous article, we looked at some ways to avoid being scammed when buying a horse. But even the most diligent buyers sometimes get duped. So, what happens if the peach of a horse you just bought turns out to be a lemon?

There are several avenues you can pursue if the purchase of a horse goes bad. Here are some of the more common ones.

Breach of Contract

A breach of contract occurs when a party to a contract fails to uphold his part of the agreement. While a claim for the breach of a verbal contract is possible, when it comes to horse sales, the chance of success depends largely upon the specificity of a written contract. A verbal promise by a seller regarding a horse’s traits would be hard to prove, but if your contract contains specific language that addresses your particular issue, your chances of success increase. For instance, in Joe Jones’ situation, if his contract specifically stated that the pony had a docile temperament suitable for a child to handle, his breach of contract claim would be much stronger than if it was simply his word against the seller’s. This is especially true if the contract contains the catch-all exclusion of “sold as is.” Breach of contract claims often turn on the specific terms of each individual contract since they reflect the expectations of the parties involved. For this reason, the language of a contract for the sale of a horse should be as specific and detailed as possible. Otherwise, exclusionary language (i.e. “sold as is,” or “seller disclaims any warranties”) can serve as a viable defense by the seller against any verbal promises a buyer thinks were made.

Uniform Commercial Code

The Uniform Commercial Code (or “UCC”) basically provides a set of rules and regulations governing commercial or business transactions, including the sale and transfer of personal property, such as horses. The UCC is based upon contract law, and many of the same principals applicable to a breach of contract claim apply under the UCC as well. To maintain a claim under the UCC, generally the seller must be in the business of selling horses on a regular basis. In other words, a private individual engaging in a one-time sale will typically not be subject to the UCC. Further, the value of the purchase must be greater than $ 500.00. Generally, the agreement subject to the UCC must be in writing (although there are circumstances when an oral agreement can be subject to the UCC as well).

Under the UCC, the item or property sold must be fit for the particular purpose for which it is intended. Further, the seller must know of that purpose, and the buyer must be relying on the seller’s skill and judgment in that regard. For instance, in Joe Jones’ situation, to maintain a claim under the UCC, Joe would have to show that the seller regularly sold horses. Second, he would have to show that the seller was aware of the purpose of the pony (i.e. for Joe’s young daughter to ride). Third, Joe must show that he relied on the seller’s skill and expertise (not his own expertise) in determining that the pony was docile enough for a child to ride.

Under the UCC, the seller has certain defenses. For instance, as with breach of contract, a seller can claim that there was an express waiver of any warranty for a particular purpose. Further, the Courts have found that a failure by the buyer of a horse to have the horse examined by a vet prior to sale can act as a waiver to any warranty of fitness for a particular purpose.

If a claim is successful under the UCC, a buyer may be entitled to recover not only the cost of the purchase, but also any related costs, such as vet fees, property damage, or transportation costs.

Consumer Protection Act

The purpose of the consumer protection act (“CPA”) is to protect unsophisticated buyers against unfair or deceptive trade practices. Unlike the UCC, the CPA is not dependent on a contractual relationship, and can apply even if there is no written contract. A seller can run afoul of the CPA by engaging in activity that is specifically prohibited under the language of the Act, or by engaging in activity that is misleading or deceptive in nature. The intent to mislead is not necessary, so long as the action can be reasonably construed as misleading to an unsophisticated buyer. So, in Joe Jones’ case, if the seller administered medication that made the pony appear more docile than it was, those actions could clearly be construed as misleading to a buyer even if the seller didn’t intend to mislead Joe, but only gave the pony the medicine so that he himself could handle the animal more easily.

Under the CPA, a failure to disclose an existing problem with a horse, even if the buyer doesn’t directly ask, can be construed as misleading/deceptive. In addition, unlike contract law, under the CPA, exclusionary language (such as “sold as is”) will not serve as a defense. Neither can the failure of a buyer to have a horse examined by a vet be used as a defense.

With regard to damages, under the CPA, some states allow not only for the refund of the sale price plus out of pocket costs, but also permit punitive damages of up to three times the actual financial loss suffered. Thus, actions brought under the CPA can work to a buyer’s advantage if the necessary elements can be proven.

Of course, volumes have been written about each area of law that this article touches upon, and the options presented are meant only as a very basic overview. If you have been the victim of a good sale gone bad, you should speak to an attorney specialized in equine law in order to fully explore your particular options.

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.