BUYERS REMORSE -- WHAT SHOULD THE SELLER DO

BUYERS REMORSE -- WHAT SHOULD THE SELLER DO

by
Julie I. Fershtman, Attorney at Law
Author of Equine Law & Horse Sense
(248) 851-4111

     Julie Fershtman's second equine law book is going to press shortly and will be released later this year. As Julie puts finishing touches on the book, she is devoting this article to some of the general legal questions actually received from people across the country and her answers.

Question: Dear Ms. Fershtman:
     I sold my horse a few months ago. The buyer now claims that I misrepresented the horse. The buyer bought the horse for her daughter, who is an inexperienced rider. When I described the horse to her, I told her that he was not a beginner's horse. She brought her daughter to see the horse, anyway, and her daughter rode the horse. They did fine together but you could tell that she was afraid of the horse. I explained to them that the horse is normally very quiet, but occasionally would get scared of other horses when being ridden.     The buyer brought her daughter back twice more to ride the horse. I told her that I was concerned that this horse was not right for her daughter, and that I was afraid she would get hurt. They bought the horse anyway. We both signed a Bill of Sale that I typed up basically stating that the horse is sold as is with no warranties expressed or implied.    Since that time they have called me and said that the horse is now running away with the girl and she has fallen off, but not hurt, thank goodness. (He never ran off with me. In fact he was a champion horse last year.) The buyer is trying to re-sell the horse but wants me to take half of any loss. I feel that I was totally honest with her. Does she have a case?– Horse Seller

A: Dear Horse Seller:
     It seems that you were very cautious in this horse sale situation, in that you did several things. First, you allowed the buyer and her daughter a reasonable chance to test out the horse. Second, you voiced your concerns -- a few times -- about the perceived unsuitability of the horse. Third, you wrote a Bill of Sale that disclaimed warranties (I can't vouch for how legally-sufficient you did it, but you at least tried to address it).
    As I see it, here is the problem: With all the problems you saw, if you were still willing to sell the horse to a buyer whom you believed was unsuitable, it appears that you were not cautious enough in what you put writing.
    Even assuming that the "as-is" disclaimer you put in the sale contract had legally sufficient language, it is still at risk of being the target of a legal challenge. In a growing number of states nationwide, courts are ruling that an "as-is" disclaimer -- regardless of how well-worded it is – cannot insulate the seller from a case for fraud IF the seller, under the circumstances of the sale, had a duty to disclose a known problem. Consequently, if the buyer tries to claim that you defrauded her, your "as-is" language may be questionable. A lawyer in your state can explain this further based on your state's position on this legal issue.
    How will you fare if the buyer targets you for sales fraud? Do you have anything in writing that helps you? Well, remember when you voiced concerns to the mother that the horse was not a suitable match for the daughter? Chances are that you have nothing in writing to this effect. Worse yet, I'll bet the buyer will swear that you never uttered any cautionary statements. Should this dispute play out in the legal system, you and the buyer will have totally different accounts of the same transaction. For all parties involved, the lawsuit will not be quick, easy, or cheap.
    Here are two ways in which you might have prevented the problem:
    First, since you spotted a potential legal dispute from the moment the inexperienced buyer and her daughter showed interest in your horse, your sales contract could have reaffirmed your cautionary words about the unsuitability of the horse for the buyer's daughter, but explained that the horse was not known to have vicious or dangerous tendencies. You could have written into the contract that you encouraged the buyer to have the horse examined by an independent equine professional to determine the horse's suitability for the buyer's daughter. There are ways to put this tactfully in a sales contract. A lawyer can help you.
    Alternatively, you might have been able to refuse to sell the horse to this buyer.
    Now the buyer proposes to resolve the dispute through which she sells the horse to someone else, and you will be responsible if there is a shortfall from the original sale price. Should you accept this offer? First, have someone who knows the law in your state advise you on how your contract might fare in a legal challenge. If you get high marks, you have reason to stand your ground. Second, be practical here. Even if you look good in the eyes of the law, you may be facing thousands of dollars in legal fees if the matter goes to court. Are you ready for that? Your lawyer can advise you whether it makes sense -- from an economic standpoint alone -- to accept the suggestion the buyer now offers you or whether you should accept a return of the horse. Finally, any resolution of a real or potential dispute, in my opinion, calls for a carefully-worded contract. If you settle the matter with the buyer, please consider a settlement contract that includes a mutual
release of liability. Your lawyer can discuss this with you.    Good luck, and keep on getting it in writing!
    -- Julie Fershtman
    This article does not constitute legal advice. When questions arise based on specific situations, direct them to a knowledgeable attorney.

About the Author

Julie I. Fershtman is an attorney with a law practice serving the horse industry. In her 15 years as a lawyer, she has achieved numerous courtroom victories and has drafted hundreds of contracts. An independent lawyer rating service gives her its highest rating for abilities. She can be reached at (248) 851-4111.

Looking for good resources on Equine Law? Ms. Fershtman's books are highly informative, easy to understand, and even easier to order. MORE Equine Law & Horse Sense, the newest book, sells for $22.95 + $4 shipping and handling. Equine Law & Horse Sense, the first book, sells for $17.95 + $4 shipping and handling. Michigan residents add 6% sales tax. To order, contact Horses & The Law Publishing at (866) 5-EQUINE, a toll-free number, or send check or money order to Horses & The Law Publishing, P.O. Box 250696 Franklin, MI 48025-0696.