We all enter into contracts on a regular basis and have become complacent and often unaware to these binding agreements becoming an all-encompassing part of our lives. We would never dream of buying a house or a car without a contract; nor would we purchase a boat, motorcycle or even household appliances without some form of written document. Even services as simple as cell phones or cable television are subject to pages and pages of contractual agreements designed to give the provider and consumer protection if the deal goes sour. So why haven’t buy/sell agreements become as pervasive in the Equine world?
Many theories exist as to why contracts haven’t become mainstream in the equine circles. Many people enjoy the “handshake” agreement of a horse trade likely due to the trust earned through experience and reputation in the industry. It is upon this trust alone that hundreds or thousands of dollars is exchanged for a horse that is being shipped across the country, if not internationally. The problem is, many disputes have nothing to do with the honesty or trustworthiness of the seller or buyer. Rather, it is the unforeseen circumstances that cause disagreement and ruin relationships or reputations. Many of these circumstances can be avoided with advanced planning.
This is the problem with “handshake” agreements; they don’t address most issues that impact many equine transactions. This leaves both the buyer and seller exposed to possible damages and misunderstandings. A good buy/sell agreement should be all encompassing. It should contain provisions that include an accurate and adequate description of the horse, the purchase price, the full and final terms and conditions of the sale (what condition the horse is in, inspections completed or waived, recitation of the owners right to sell, etc.), a date of execution, as well as the signature of all parties privy to the agreement.
Buyers and sellers should also consider including provisions that may be beneficial to one or both parties. For example, the inclusion of a “first right of refusal” provision may be desired if there is an emotional attachment to the horse, giving the seller the chance to buy back the horse the next time it is sold. In addition, a well drafted agreement should also include the available remedies if the sale does go bad so that both parties can understand and limit their exposure to liabilities prior to entering into the agreement. Finally, the agreement should include a paragraph that includes the governing law that both parties agree to use in settling any dispute. This is especially important in interstate or international contracts. It can be very costly for a Michigan resident to answer a civil complaint in another state, let along another country. This could be addressed in a buy/sell agreement before hand, giving all parties notice of available legal remedies.
Buying or selling a horse is a momentous occasion. For most equestrians, buying and selling a horse is not something that is done often. But make no mistake, just as any other major purchase, it can go very wrong if the parties fail to plan for unforeseen contingencies. The public at large regularly seeks professional advice when making many major purchases such as a home, car, or even household appliances. Why wouldn’t it be the same for buying or selling a horse?
MPM works hard to be your resource for Equine Law and Liability. Please follow us on Facebook, LinkedIn, or visit www.mpmtrialattornesy.com for further information regarding equine legal issues, including buy/sell agreements.