Equine Law Blog

8 Suggestions for Avoiding Equine Sale Disputes

A few years ago I represented buyers of a horse who were victims of sales fraud.  We took the case to trial, and we won.  The judge even ordered the sellers to pay 100% of my clients’ legal fees.

The facts of the case were not complex.  My clients bought a show horse for their daughter, a novice rider.  In sales literature, the sellers represented this horse, a gelding, as “sound” with “no bad habits” and “ready to show.”  My clients brought their daughter before the sale to test ride the horse, and he behaved beautifully in a chaotic environment with many distractions.  Two days after the purchase, however, the horse showed drastic behavioral changes.  He was unruly and dangerous.  The sellers refused to reverse the sale.  Left with a dangerous, unsound, and unsuitable horse, my clients had no choice but to hire me to help.

The fact is, many sales disputes can be avoided.  Here are eight suggestions for what sellers should not do when selling a horse:

1. Do not publish statements in advertisements without making at least a reasonable effort to check them for accuracy.  In the suit I tried, the horse was advertised as “sound,” with “no bad habits” and “ready to show.”  Make sure you can confidently stand by the statements in your ads.  At trial, I proved these statements false and raised serious questions about whether the sellers recklessly put them in the ad.
2. Do not assume that the wording of your sales ads carries no legal weight.  It absolutely can.  Under the law of several states, advertisements could qualify as warranties for which sellers can be held legally accountable if the horse fails to measure up to them.
3. Do not assume that as-is” language in a sales contract prevents all lawsuits.  Although “as-is” language can protect sellers, courts in several states have ruled that these clauses may not stop certain claims of sales fraud against the seller.
4. Do not assume that the law is “buyer beware” and horse buyers have no rights.  Buyers have rights and, in an appropriate case, have recourse against sellers.  Depending on the facts and applicable law, some cases fail and some succeed.
5. Do not assume that if a seller loses a sales case, the most he or she stands to pay is a refund of the buyer’s purchase price.  Laws in many states could find a court ordering sellers to reimburse the buyer’s attorney fees and costs.  Also, some states have consumer protection/deceptive trade practice laws that, if applicable, might obligate a losing seller to pay the winning buyer “treble damages” where the buyer’s losses are tripled.
   
   
Regardless of whether the seller wins or loses, the seller will almost definitely be required to pay his or her own legal defense costs.  Even a winning defense can be very costly.
6. Do not assume that the seller’s liability insurer will handle a sales lawsuit against and pay the seller’s legal defense fees.  Standard homeowner’s insurance policies and commercial liability policies are not designed to respond to claims involving contract and sale disputes where the buyer seeks money and rescission.  (Be sure to read your policy carefully and discuss your coverage questions with your insurance agent and/or your lawyer.)
7. Do not assume that silence, in response to the buyer’s questions, will shield a seller from liability.  For example, if a horse has a well-known tendency to kick out forcefully at the stall walls, your concealment of this information from a would-be buyer who specifically asks about the horse’s stall manners could set you up for liability for fraudulent concealment.
8. Do not assume that horse buyers never sue.  Buyers can and sometimes they do.  And as the trial I won indicates, horse buyers sometimes win their cases.

Categories: Sales/Disputes