Guest Post: Top Ten Pre-Purchase Exam Considerations

As a follow-up to last Thursday's post, Tips for Equine Pre-Purchase Exams, the following is a guest post by veteran Kentucky equine lawyer, Joel B. Turner, with valuable information concerning pre-purchase exams and other steps buyers can take to protect their interests in a horse sale transaction.

"As a 'horse lawyer', people usually do not call me to tell me how happy they are with their newly- purchased horses.

One of the most common calls from potential new clients (i.e. the variety that is extremely unhappy and ready to litigate) involves the post purchase discovery of a serious soundness issue. Recently during one such call I rudely interrupted the caller to interject, "Excuse me, but let me guess which joint is causing your horse an issue?" My guess was correct and the caller was dumbfounded. While it was the first for her, the same sorts of issues crop up time after time in my world.

How do you protect yourself in a situation like this? 

a) Have a veterinarian, your veterinarian, perform a thorough pre-purchase examination; and

b) have an experienced lawyer prepare a contract to close the loopholes by obtaining proper warranties/ representations from the seller. 

The combination of these two steps should provide adequate protection from the possible deceptions that so often turn an excited purchaser of a new horse into a disgruntled, if not disillusioned, victim and caretaker of an unsound horse.

Top ten pre-purchase exam considerations:

1.            Is the vet performing the exam absolutely free from any conflict of interest or possible undue influence? Make sure the vet (and any vet who is a member or employee of his/her group or practice) has never performed any services for the seller. Do not, under any circumstances, ask the seller to refer you to a vet to perform the pre-purchase exam or consult about radiographs, ultrasound images, etc.

2.            Is the veterinarian performing the pre-purchase exam willing to promptly (within 24 hours) provide a written report of his findings and make all radiographs and scans available digitally for the potential purchaser to use to obtain a second opinion, if necessary?

3.            Is the veterinarian willing to review all the vet records obtained from the seller and watch the horse being ridden (preferably by the potential purchaser) as part of the pre-purchase evaluation for soundness/coordination-neurological issues?

4.            Does the vet know how much money you intend to pay for and the purpose for which you are purchasing the horse? Share the purchase price with the vet and ask the vet to assume you are buying the horse for resale; if you want the highest level of scrutiny and are willing to pay for it, this request will put the vet on notice of your intentions and encourage a much closer look.

5.            Is the seller willing to provide all veterinary records (including all medications dispensed, radiographs, ultrasounds or nuclear scintigraphy, i.e. "bone scans" performed) for the last 18 months to two years as well as any other "therapy" records such as acupuncture, massage, shock wave, hyperbaric chamber, etc. for review by you and your vet prior to the purchase decision?

6.            Is the seller prepared to represent that, at the time of the pre-purchase exam, the horse is not under the influence of any medication, is not being treated with any substance to address any past or present physical condition experienced by the horse and is willing to allow the veterinarian to take a blood sample for drug testing to verify the accuracy of this representation?

7.            Has the horse been examined by a vet in connection with a potential purchase within the last year?

8.            Is the seller willing to represent that the horse has not had any surgery or any intra articular injections of any substance (including without limitation, corticosteroids, blocking agents or hyaluronic acid) during the seller's ownership, other than those disclosed by the seller, or if such surgeries or "joint' injections have been performed upon the horse and are disclosed, is the seller willing to identify all of the dates when such procedures were performed and what substances were injected into which joints?

9.            Is the veterinarian willing (and capable) to effectively communicate to the potential buyer the significance of the findings and provide an opinion as to the functional effect of these findings in writing promptly after the examination is completed?

10.          Is the veterinarian sufficiently experienced with the particular type of riding that the potential purchaser intends to do and the kind of work that the horse has been doing, to provide the potential purchaser with a high level of confidence that the vet understands the amount and level of work the horse will have to perform to fulfill the buyer's intended use?

This list is not exhaustive and does not address such issues as pre-purchase considerations for future breeding soundness of the horse. It is focused upon the veterinarian's performance of the pre-purchase exam for a performance horse, and the seller's willingness to make reasonable disclosures of the horse's condition. This list has a particularly narrow focus on determining if there are any pre-existing issues that could lead to unsoundness making the horse incapable in the future of performing the tasks for which it is being purchased.

In this era when aggressive veterinary intervention with lameness issues, (particularly with the prevalent use of intra articular injections of corticosteroids), is far more common, latent defects in horses may be hidden even from the experienced examining vet, if proper due diligence is not performed in conjunction with the pre-purchase exam. The combination of a) the seller's reasonable disclosures in response to the purchaser's requests coupled with, b) representations and warranties in a written purchase agreement, and c) a thorough pre-purchase veterinary exam performed by an unbiased, qualified vet working exclusively for the potential purchaser, may afford the best opportunity to avoid the heartbreak and financial loss caused by a post purchase discovery of a latent, undisclosed and undetected condition suffered by a horse after the sale is final."

 © Joel B. Turner of Frost Brown Todd LLC 2011

About the Author:  Joel B. Turner is a Kentucky attorney practicing equine-related law for the last 27 years. For Joel's full biography, click here.

Tips for Equine Pre-Purchase Exams

Having a thorough pre-purchase veterinary examination done prior to a horse sale is one of the best ways parties to a horse sale can prevent disputes and lawsuits. 

Dr. Camille Knopf, an equine veterinarian in Northern California, offered some excellent advice this week on the blog Ribbons and Red Tape:

Always, always, always have a pre-purchase exam performed. Regardless of length of familiarity with the horse or seller, there should always be a thorough pre-purchase exam performed to provide you with a complete understanding of the health of the animal you are purchasing.

Always have a veterinarian pull and store blood at the time of pre-purchase exam. This blood can be stored for several weeks. If you purchase the animal and later suspect the horse may have been under the influence of a medication at time of exam, the serum can be analyzed for medication and may provide you with legal recourse if necessary.

Be cautious in purchasing any horse where the current owner wants to choose the veterinarian for pre-purchase exam, discourages you from having a pre-purchase exam, or discourages you from using a veterinarian of your choice. Reason: Sadly, the horse business is not immune to fraud and neither is the veterinary world. By choosing a veterinarian that does not have a direct relationship with the seller, you can protect yourself from a potentially biased opinion."

Here are some additional tips for pre-purchase exams that can go a long way to help prevent litigation:

1.     Buyers will often ask sellers for a referral if they do not know any veterinarians in the seller’s area. It’s not always a sign that something is amiss if a seller recommends a veterinarian with whom the seller has a business relationship, as long as the seller discloses the relationship to the buyer. If a buyer asks a seller for a referral, the seller can provide buyers a list of veterinarians in the seller’s area and allow the buyer to choose from the list. If the seller has a relationship with any of the clinics or veterinarians on the list, the seller should disclose that fact to the buyer.

2.     Generally, sellers should not allow a buyer to take a horse off the seller’s property for a pre-purchase examination. The seller or their agent, employee, or representative should be the one to haul the horse to the vet for the exam, if necessary. If the buyer chooses a veterinarian that is so far away that this becomes unduly burdensome for the seller, the parties should work out an agreement on who will pay the transportation costs.

3.     As the term "pre-purchase exam" implies, it should be done prior to the purchase!  That is, a pre-purchase exam should be performed before any of the following occurs: a) the buyer takes possession of the horse; b) the buyer pays the purchase price for the horse; and c) the buyer receives a bill of sale from the seller. A seller can take a down payment on the horse to either refund or apply towards the purchase price, depending on whether the pre-purchase exam results are satisfactory to the buyer. However, it is not advisable for a seller to hold a check for the full purchase price and agree not to cash it while the buyer is inspecting the horse.

4.     Sellers should always encourage every buyer to get a thorough pre-purchase exam and to inspect horses either in person or through an agent prior to the purchase or delivery of the horse. This thorough inspection protects the seller just as much as it does the buyer.

5.     If the seller purchased the horse from a third-party, the buyer should ask the seller if the seller had a pre-purchase exam performed prior to the seller's purchase.  If the answer is yes, the buyer should ask the seller for a copy of the results of that exam.  

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