by Gabriella Cellarosi Daniel, Esq
Requiring a non-refundable deposit can be a good option because it demonstrates a commitment to the horse regardless of whether the sale goes through. If the potential buyer wants to take your horse off the property, but is not willing to lose 10%, he/she may not be that serious about purchasing the horse and appreciate the risks of taking the horse out of your control.
An alternative course of action would be to sell the horse, transfer possession and registration, and execute a Purchase Agreement which outlines purchase contingencies. For example, purchase contingencies could include, return of the horse after a period of “x” days for only “x” reasons provided that the horse is returned in the same condition. Or, that the Purchase Agreement is subject to veterinary examination. In the case of a contingency being based on a veterinary exam, the seller may wish to include in the Purchase Agreement conditions (e.g. cribbing) that might cause it to “fail” an exam but would still make the horse suitable for the buyer’s intended purpose.
Other provisions that may be wise to include are that potential buyer agrees to be financially responsible for all transportation costs to/from Seller’s Stable and reasonable vet and farrier fees incurred during the trial period.
What if the horse is stolen or has a freak accident and dies during the trial period? To protect against death, theft, and/or loss of use, as a protection, consider requiring that the horse be insured and have the policy name the seller as the beneficiary. Another option is to have the potential buyer to obtain and maintain mortality, major medical and loss-of-use insurance for the full purchase amount to be in effect before hauling the horse out for trial and kept in effect until horse is paid in full and full bill of sale is received. Alternatively, the parties can split the cost of the insurance.
4.Risk of Loss & Negligence
The trial agreement should include some language that addresses the possibility of injury or death of the horse, and potentially that the buyer is responsible if among other things, the horse gets injured or dies while the horse is in potential buyer’s custody, care, and control. This provision should indicate that it is effective from the moment the horse leaves the seller’s property and continues until the horse’s return. Depending on whether you require the potential buyer to obtain insurance, consider adding language that the potential buyer assumes all expenses that are not covered by Seller’s Mortality, Major Medical and Loss of Use Insurance, related to any accident, illness, or other peril that may occur including death or permanent disability of horse. Further, that rider is responsible for any fees/costs stemming from its negligence.
Consider any injuries that may occur to the potential buyer and/or buyer’s trainer while riding your horse. You also may want to include language the seller is not responsible for any injuries to potential buyer, i.e. a liability release. Consider having the trainer execute a liability release, as well. However, be mindful that a determination of negligence and liability may be subject to the specific facts and circumstances and interpretation of case law in your jurisdiction.
5.Choice of Law, Venue, Arbitration, and Attorneys’ Fees
In addition to the above-mentioned provisions, provisions to also potentially include, but are not limited to: choice of law and/or venue clause (if there comes a time when there is a dispute and a lawsuit is filed, where do you want to litigate the action); arbitration provisions (do you seek to avoid costly and time consuming court litigation and require parties to undergo arbitration); attorneys’ fees (if there is a dispute and a lawsuit follows, will each party bear their fees/costs with the lawsuit or will the prevailing party’s fees/costs paid by the losing party).
Sending your horse on trial is a big decision and one that includes some planning to ensure you and your horse are protected in case something goes awry while your horse is out of your possession.
Gabriella Cellarosi Daniel, Esq. of Eckert Seamans Cherin & Mellott LLC helps clients set up their equine businesses. She also handles litigation, mediation, and dispute resolution, as well as counsels clients on liability prevention. To assist her clients, she draws on her legal experience and over 30-years in the horse industry, riding and caring for show, race, breeding, and pleasure horses. She grew up on a horse farm in Maryland, where she took care of mares and foals, started young horses, foxhunted, evented, exercised racehorses, and showed. If you have any questions about this article or your equine legal issues, please send an email to email@example.com or call 202-659-6612.
This article does not create an attorney-client relationship between you and the author. This article is not a substitute for competent legal advice from a licensed professional attorney in your state.