by Rachel McCart, Esq.
It’s no secret that the horse industry is historically a handshake business, and even high-end horses are often bought and sold today without the benefit of a contract. At the same time, the second most frequently litigated area of equine law (after personal injury) is horse sales and purchases. Disputes over horse purchases and sales are generally matters of contract law, and therefore, the outcomes of such matters are heavily dependent upon what the contract says (if there is one).
Here are the minimum basic ingredients for a good horse sale contract:
Identify the Parties. Who is selling the horse, and who is buying the horse? Make sure that all parties’ full and correct names are included in the horse sale contract, as well as their respective mailing addresses, telephone numbers, fax numbers and email addresses. The sellers’ names in the horse sale contract should match (exactly) the names of the owners listed on the horse’s registration papers. If there is more than one buyer and/or seller, all buyers and sellers should be listed.
Identify the Horse. The description of the horse in a horse sale contract should include, at a minimum: The horse’s name (registered name, if it has one), breed (including the full name of the applicable registry/ies), age (foaling year is the best method to avoid confusion), and color and markings (as stated on his registration papers).
Name the Price. The horse sale contract should state the full sale price of the horse, including any deposit credited toward the sale price. If any items or services are to be credited toward the horse sale price, these items should be clearly identified, particularly services.
If the buyer will be paying in installments or on any other terms than cash and carry, these terms should be very clearly spelled out in the horse sale contract, including all applicable due dates, and penalties and remedies for non-payment and late payments.
The horse sale contract should also state the amount of any commissions that will (or have already been) paid in connection with the sale, including the party who is responsible for paying the commission and the person/entity who will receive the commission.
State any Conditions. Is the horse sale subject to the outcome of a pre-purchase vet check or trial period? Is the seller offering any guarantees? Is the buyer accepting the horse with some behavioral and/or physical problems? Is the horse being sold with tack or equipment? If so, the horse sale contract should clearly spell out what these conditions are, including what happens if the conditions aren’t met.
Include the “Legal Clauses.” The horse sale contract should contain what is known as a governing law and venue clause, which states where any disputes must be brought (e.g., county and state), and what state’s law will govern the contract.
The horse sale contract should also include what is known as an attorneys’ fees provision, which states that if the contract is the subject of a lawsuit, the winner can collect attorneys’ fees and costs from the loser. (Without this essential provision, each party can generally expect to pay their own legal fees and court costs, with no hope of recouping them from the opposing party, even if the lawsuit is frivolous.)
Additionally, the horse sale contract should include what is known as an integration clause, a clause that states all of the terms of the deal are within the four corners of this contract. Finally, the horse sale contract should include what is known as a severability clause, which essentially says that if a court finds any provision of the contract unenforceable, the rest of the contract can still be enforced.
Don’t Forget the Signatures! Unless a horse sale contract has been signed, it’s typically unenforceable.