International Horse Sales Part II: Terms to Include in Your Purchase & Sale Agreement

In addition to the terms usually included in a contract to buy a horse, a Purchase and Sale Agreement involving the shipment of a horse to another country should include the following terms:

1)                  Applicable Law: Will your country’s law, or the law of the other party’s country apply to the contract? This is important, considering that certain German-speaking countries have “minimum warranty” statutes applicable to horse sales (die Gewährsmängel). These minimum warranty statutes may make it virtually impossible for a buyer to resell a horse if it has any of the problems (such as cribbing) that do not meet the “minimum warranties” in those countries.

2)                  Terms for Delivery of Horse & Money: Your agreement should set for a specific protocol for when and where the horse, the bill of sale, registration papers and health certificates, and sales proceeds should be delivered.

3)                  Commissions: Your should specify which parties are receiving a commission (buyer’s agent, seller’s agent, or both?), the amount of the commission, and the protocol for the delivery of the commissions.

4)                  Disputes. How will disputes, if any, be decided?  Having to bring suit in another country in the case of a horse sale gone bad is time-consuming, expensive, and may be impossible. I recommend including a provision for alternative dispute resolution in international horse sales contracts, naming a reputable mediation or arbitration forum such as Equestes to settle or decide disputes.

Top 4 Things to Have When Buying or Selling a Horse Internationally

Before you buy a horse from someone in another country or sell a horse internationally, you must have the following four items in place to help avoid disputes and headaches:

1)         Written Purchase and Sale Agreement.  An international sale is typically not one where a buyer can show up with a trailer, hand the seller a check, and load up the horse.  In addition to the usual points typically covered in ordinary sales contracts (description of horse, price, warranties or lack thereof, pre-purchase exam conditions, et cetera), your international sales contract needs to address the logistics of how and when the horse, its papers, and the money will be delivered. Stay tuned, as I will do a post next week on the items your international sales contract should include.

2)         Escrow Service. The use of an escrow service to hold sales proceeds and commissions until certain terms of your Purchase and Sale Agreement have been carried out is a huge help in avoiding disputes and confusion. 

3)         Written Bill of Sale. Your bill of sale, and not the registration papers or health certificate, is the instrument that transfers title to the horse. Your Purchase and Sale Agreement should make clear when the bill of sale should be delivered to the buyer (usually, it is delivered with the horse together with registration papers and health certificates after the escrow account is funded).

4)         Identification of Quarantine Requirements. Identify quarantine and health certificate requirements, and find a reputable quarantine facility and shipper to handle your transaction. 

The last thing anybody wants is an international lawsuit on their hands.  Having the above items in place will greatly diminish the chances that you'll ever be involved in one.

Health Records and Civil Liability

   

If you are selling a horse, especially one to be shipped to a buyer in another state, you should take all measures necessary to ensure you have complied with state health documentation requirements. If a buyer wants to undo a sale and a lawsuit or dispute arises, the buyer will go through all documents you provided with a fine-tooth comb and attempt to find every detail you missed or your vet might have overlooked. 

For example, if you sold a 10 year-old horse and the negative Coggins certificate says the horse is 11 years old, a buyer might accuse you of fraud and report you to the state inspectors in charge of investigating health certificates. Mistakes involving Coggins tests are relatively common, especially in the case of large auctions where an owner may not be present to make sure the Coggins given to the buyer is on the correct horse and is accurate. Therefore, you should carefully review all health records on any horse you are selling and make sure all information is complete and correct (including the age, gender, color, breed, markings, and brands included on the health certificates). Most veterinarians will work with you to quickly issue a corrected certificate in an emergency situation. 

I am not aware of any law imposing criminal penalties on a horse owner because their veterinarian made a mistake in the description of a horse on a Coggins test when given correct information by the owner. It is ultimately the licensed veterinarian’s legal duty to correctly fill out the description of a horse on a health certificate. However, if a buyer is accusing you of civil liability for misrepresenting a horse, an inaccurate Coggins test provided by you might be a significant detriment to your case.

It is relatively easy to familiarize yourself with the state laws applicable to documentation required for horse sales and transportation.  USRider has compiled a database of state equine transport laws and contact information for the state veterinarian of each state. 

The Equine Infectious Anemia (Coggins) and the Quarantine & Health laws for each state can be found at the Equine Law & Horsemanship Safety website. Please note that the information on these sites might not be updated each year. Therefore, if in doubt you should pull the statutes excerpted by the sites and make sure they are current.

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