Studbook Zangersheide attaches great value to providing her readers with the correct information and to support them in word and deed whenever necessary.
It is for this reason that your Studbook has asked me to share my experiences with you regarding the processes involved in the buying/selling of horses. In this second legal column I will try to give tips and tricks on the basis of FAQs, which you as buyer or seller can use when buying or selling a horse.
Whereas in former days negotiations in the horse trade were conducted by a firm handshake followed by payment and prompt delivery, in this day and age this is completely different.
Nowadays, both buyer and seller have some reservations when it comes to the transaction. Should I really buy that horse because … Should I sell it to that customer because …
Even more so, these days buyers as well as sellers feel distrust rather than trust for their contractual partner. This is definitely not how it should be and implies the failure of the relationship even before any potential problem might manifest itself.
In this light, it is certainly advisable to put all agreements plainly in writing to prevent any potential discussions at a later stage as much as possible. The following matters could e.g. be considered:
The identity of both seller and buyer. This will prevent a situation whereby people might argue at a later stage that they are not the actual buyer but were commissioned to buy on behalf of someone else.
An exact description of the characteristics (name, pedigree, chip number, exterior characteristics, …) of the horse. This makes it possible, at every stage, to verify that the sold/bought horse corresponds with the horse that was delivered.
The price, manner of payment (cash or by bank transfer) and the time when payment of this price is due.
The date/time when the horse has to be delivered.
Which party carries the risk of the horse’s death prior to the moment of delivery. The buyer or seller.
The purpose, intended use for which the horse was bought.
Anyone who, in this day and age, purchases a horse without prior veterinary inspection does not act in line with what is expected in the equestrian world. It is generally known and has become a generally accepted use that buyers seek advice from their own veterinarian prior to their purchase decision. Let me make myself clear: the buyer should seek advice from his own veterinarian and not from the seller’s veterinarian (yes, this does happen!).
The seller is well advised to state the following facts on the sale document (invoice, agreement, …):
The buyer has had the opportunity to have the horse inspected;
The buyer has made use of the opportunity to have the horse inspected;
The horse was inspected by the buyer’s veterinarian on a specific date;
The buyer has accepted the inspection result, irrespective of any observations made regarding the horse’s medical condition.
The buyer can on his/her part, after the horse’s medical inspection, ask the seller for a guarantee regarding the given observations made by the veterinarian. So if the horse, within a specific guarantee period, shows a certain defect related to the given observation in the inspection report, this will be reason to annul the sale agreement.
Please note: professional sellers are expected to know every fault/defect, be it hidden or not.
Hidden defects should not be mistaken for defects that give ground for annulment of sale. Defects that give ground for annulment of sale (glanders/strangles and infectious anaemia) are on the exhaustive list of exceptions contained within the Law and always annul the purchase/sale agreement in favour of the buyer.
A purchase agreement of a horse can be declared void on grounds of a hidden defect, based on Articles 1641 et seq. of the (old) Civil Law. A hidden defect renders the horse useless for the intended use for which the buyer has bought the horse or will considerably reduce the horse's suitability for that intended use.
In case the buyer's purchase is done in his/her capacity as a consumer and not in the context of his/her professional life, then the ‘Wet Consumentenbescherming’ (Consumer Protection Act, ed.) applies to sale agreements concerning horses. In case a horse is bought in the context of a consumer purchase then this Law offers the consumer essential protection.
In this case the seller is held to offer a guarantee for every defect relating to the intended use for which the horse was bought/sold which existed at the moment of delivery of the horse and which the buyer becomes aware of within a period of two years from the moment of delivery. In case the buyer becomes aware of the defect within six months of the delivery, the defect is expected to have been present at the moment when the horse was delivered. In case the buyer becomes aware of the defect after six months from when the horse was delivered, then the buyer is held to prove that the defect was already present at the moment when the horse was delivered.
Finally, I would like to point out that anyone who wishes to claim the presence of defects has to turn to the court of law to call the seller to account, within as short a time as possible. After all, those defects will have to be established by way of cross verification. Anyone who delays to sue the seller runs the risk that it will no longer or insufficiently be possible to prove that the defect was already present prior to the purchase/sale.
Yes it is! The purchase agreement of a horse can also be declared void on grounds of so-called error based on absence of consensus and deception.
Any agreement can be declared void on grounds of error. Error can be compared to a mistake. It means a person has made a mistake with regard to an elementary/very important element of the agreement at the moment of making the agreement. Example: the buyer assumes that he/she is buying a mare whereas in reality the horse in question is a stallion.
Also, the error has to be excusable, which means that every sensible person would have made the mistake.
Additionally, the purchase agreement can be declared void on the ground of deception. Deception occurs when the seller makes use of artificial actions (lies, doping, concealments, masking defects, …) that have induced the buyer to close the purchase deal. Without these artificial actions the buyer would never have purchased the horse.
If a purchase agreement is made between a buyer and seller who have their so-called centre of main interests in different countries, the Vienna Sales Convention takes care of the relationship between parties on the condition that both buyer and seller act in a professional capacity.
Based on the Vienna Sales Convention a purchase agreement can be declared void or compensation for damages can be claimed in case the delivered horse does not correspond with the horse that the seller promised to deliver, this represents a non-conformity.
If the agreement between parties specifically states that the horse has to meet certain qualities, then the horse will be considered non-conform if it does not have these qualities.
If the parties have not described the qualities the horse has to meet in their agreement, this may qualify as a non-conformity if the horse proves not to be suitable for normal use.
If non-conformity has been established the buyer can:
Insist the seller delivers a horse that does meet the defined agreements, which will not be self-evident if the horse does not meet specific qualities for which maybe the new rider is responsible,
Demand annulment of the purchase/sale agreement,
Request a price reduction or
Claim compensation for damages.
Buyer as well as seller are well-advised to put agreements concerning the purchase and sale of a horse in writing as plainly and clearly as possible. This way both parties are fully informed of the expectations harboured by the other party in relation to the purchase and sale of the horse and this way many problems can be avoided.
If based on the above, you have any additional questions and/or observations then please do not hesitate to get in touch with me.
Klaas Koentges has been a lawyer since 2007. He specialises in corporate law and, more specifically, can advise and assist you in matters of company law, obligations, contract law, insolvency law and commercial law. Klaas Koentges is also an enthusiastic and experienced equestrian, which makes him your partner par excellence for you and/or your company in equine matters (for riders, breeders, owners, organisations, federations, etc.).