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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 when selling a horse to ensure that any representations (often statements in advertisements) can be factually evidenced. Also this is based on facts that justify any opinion or statement as to a horse’s temperament or usefulness.  When describing a horse in any advertisement, the seller needs to take great care. This in addition to any other form of communication. There is often a trail of emails or text messages that can be relied upon by a purchaser. Also when a purchaser comes to inspect and try the horse there are often conversations and representations made by the seller. Stated suitability for a particular rider can be a representation. A rider who is a beginner or novice could be characterised in this way.

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. This can place a high onus on the seller to exercise skill and judgement in the sale.

Contract between Seller and Buyer (applicable when selling a horse)

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. It also sets out who bears the transport costs.  In the case of injury during transport, the contract can state liability.

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. Contracting out of the many consumer guarantees is not possible (for example, those contained in the Australian Consumer Law (“ACL”)) .

Each state and territory has adopted the ACL (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:

• The importance of acceptable quality.
• The importance of fitness for any disclosed purpose.

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 or selling a horse. Many 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. When the purpose of a horse id disclosed, it must also be fit for this 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). For example, the horse must be fit for the purpose or purposes for which horses are commonly bought. Thus as is reasonable to an expect having regard to their price and description.  A contract cannot exclude this provision. An examination by a purchaser may exclude the condition as to any defect. Especially if the examination should have revealed that defect initially. When selling a horse, a seller should encourage a purchaser to carry out an examination of the horse. Including 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 when selling a horse 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. Consider that they can carry civil and criminal sanctions. You should seek legal advice if you have any doubt. Additional, you should also seek advice if a claim is made. You should do this before attempting to defend a claim.

Koffels Solicitors & Barristers are the number one Equestrian Law firm in Australia.