MYTH #1: Caveat Emptor AKA “let the buyer beware”
Q: What laws apply when buying and selling horses?
A common myth when buying and selling horses is that the principle of “caveat emptor” or otherwise known as “let the buyer beware” always applies to the sale.
Whether you are buying or selling it is important to know that this is not always the case.
Firstly, is the sale a private transaction or commercial? This just means, did you buy from someone who sells horses as a hobby, or who buys and sells horses as a business? (And just because a seller claims to be a hobbyist, doesn’t mean that they are!)
The principles of contract law will apply to either transaction, but if you purchase a horse from a business then the seller will also be subject to the Australian Consumer Law.
Basically this means that the horse you buy must be subjected to the same merchandise regulations as if you went to a big chain store and bought a computer!
For instance the horse must be:
• Fit for the purpose for which they are purchased;
• Of merchantable (acceptable/saleable) quality;
• Match the advertising description;
• Meet any additional promises or guarantees offered by the seller.
Failure to meet any of the above guarantees, may mean that you can make a claim for damages through the Department of Fair Trading.
BUT that doesn’t mean private sellers get off the hook! Contract law principles apply when a legal contract has been made. The next logical question that follows is this:
What constitutes a legally enforceable contract?
A contract is simply an agreed set of specific terms between consenting, competent adults, for consideration (simply put, most of the time “consideration” just means money). I give you something and, in return, you give me something.
Does it have to be formalised by a solicitor? No
Does it have to be witnessed? No (there are exceptions to this rule, but for horse sales, generally no)
Does it have to be written? No (but it’s easier if it is!)
The types of conditions are very important when it comes to horse sale contracts.
Terms need to be specific and measurable: for example, describing a horse as a “good jumper” or a “extravagantly moving dressage horse” are very broad and subjective and are unlikely to give rise to a grounds for pursuing breach of contract.
However should a seller describe a horse as a “competitive Grand Prix dressage horse” or “World Cup jumper”, these are measurable qualities. Has the horse competed in a Grand Prix dressage or world cup jumping competition? If not, and the buyer only discovers AFTER the sale that this statement is untrue, then the buyer may have an avenue for recourse.
However, if the seller can prove that, at the time of the sale, they had reason to genuinely believe that the horse was a grand prix dressage horse or world cup jumper, they may have a valid defence to the claim.
Case example of genuine belief of truth of statement:
A seller advertised a horse as 8 years of age. The buyer bought the horse on this basis and, at the time of the sale, the seller gave the pedigree of horse to the buyer which confirmed the horse was 8 years of age. When the buyer later discovered the horse was in fact 14 years old, they sued the seller. The Court decided that there was no recourse for the buyer as the seller sold the horse in good faith and held a reasonable belief (based on their reliance on the registration papers) that the horse was 8 not 14.
Case example of fit for purpose:
A seller sold a horse a sound pony club, low level show horse. After the sale, the buyer discovered the horse had chronic arthritis. Vet reports proved that the arthritic condition would have been known to the seller at the time of the sale. The Department of Fair Trading ordered that the seller refund the buyer, pay the costs of the care and agistment of the horse while in the purchaser’s care as well as their legal costs.
Case example of the importance of wording:
A mare was advertised as “in foal to” (as opposed to “served by” or “inseminated with”). The Court decided this was a guarantee by the seller that the mare was pregnant. When the buyer found out that the mare actually wasn’t pregnant, they successfully sued for breach of contract.