Contract & Misrepresentation (applicable to all sales of horses)
The law of contract and misrepresentation apply to sales of horses regardless of whether the seller is conducting a private sale, say a one off sale, or is in the business of selling horses. A purchaser can sue on the contract or in relation to any representation.
Care should be taken to ensure that any representations (often statements in advertisements) can be factually evidenced, that is based on facts that justify any opinion or statement as to a horse’s temperament or usefulness. From the seller’s point of view care should be taken in describing a horse in any advertisement or other form of communication. There is often a trail of emails of text messages that can be relied upon by a purchaser. In addition when a purchaser comes to inspect and try the horse there are often conversations and representations made by the seller which can be relied on.
Commonly, disputes as to the sale of a horse will relate to representations as to fitness for a particular purpose or usage in for example: eventing, show jumping, dressage or camp drafting. A stated suitability for a particular rider, such as a beginner or novice rider, can be characterised as a representation. This can place a high onus on the seller to exercise skill and judgement in the sale.
Contract between Seller and Buyer (applicable to private sales of horses)
In a private sale a written contract between seller and buyer can include provisions or acknowledgements that assist in limiting the effect of any representations to those set out in the contract. This can be somewhat difficult in sales in trade and commerce given the effect of consumer law (see below).
Contract between Seller and Buyer (applicable to all sales of horses)
The contract can also set out such basic terms such as whether the sale is subject to a veterinary inspection and whether any deposit is refundable if the veterinary report is not satisfactory. It can set out when title to the horse passes from seller to purchaser and who bears the transport costs and what happens if the horse is injured during transport.
Consumer Laws (applicable to sales in business or trade)
Consumer laws place onerous duties on sellers, particularly those in business or trade, and provide wide ranging rights to purchasers, particularly in relation to horses purchased for personal, domestic or household use. Many of the consumer guarantees (for example those contained in the Australian Consumer Law (“ACL”)) cannot be contracted out of. The ACL has been adopted in each state and territory, for example Part 2 of the Fair Trading Act 1987 in New South Wales.
In respect of the sale and purchase of goods, including a horse, the main Consumer Guarantees which are generally relevant to the sale of horses are set out in part 3-2 of the ACL. Two guarantees particularly relevant to the sale of a horse include:
acceptable quality (including fit for all purposes for which the goods of that kind are commonly supplied, acceptable in appearance and finish, free from defects, safe and durable)
fitness for any disclosed purpose (that is made known by the consumer to the supplier), correspond with any description and/or comply with any express warranty
False or misleading representations and misleading conduct can also carry criminal liability with fines of up to $1,100,000 for companies. The representations or conduct can be made relation to the sale of horses. There are a number of specific areas of sales whereby misrepresenting or misleading a consumer are effectively deemed to be strict liability offences. While the numerous issues are not detailed here they include, for example, quality and/or value and advertising.
Sale of Goods Act (various provisions apply to business sales)
The Sale of Goods Act 1923 (NSW) also imposes strict conditions on sellers. A horse must be fit for any disclosed purpose provided the purchaser relies on the seller’s skill or judgement. In this case the seller must be in the business of supplying horses.
A seller who deals in goods of a certain description also provides an implied condition that the horse is of merchantable quality (section 19). In the case of a horse the horse must be fit for the purpose or purposes for which horses are commonly bought as is reasonable to expect having regard to their price and description. This provision cannot be specifically excluded from a contract. An examination by a purchaser may exclude the condition as to any defect if the examination should have revealed that defect. A seller should encourage a purchaser to carry out an examination of the horse both as to riding the horse and an expert veterinarian examination.
Contract between Seller and Buyer (applicable to sales in business and trade)
A contract between seller and purchaser is helpful as to basic terms as set out above. While a seller cannot contract out of their obligations under legislation the contract can set out the purpose for which the horse is suitable and can agree that the purchaser has enjoyed the opportunity to have the horse inspected by a veterinarian. This can assist in limiting the effect of the legislation.
Managers and directors of businesses and companies should be aware of the pitfalls of conduct that can carry civil and criminal sanctions. If you are in any doubt or a complaint is made you should seek legal advice and before attempting to defend a claim.
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