The days of selling a horse with a handshake and cash on the barrel are long over. There is no such thing as a cheap horse, even if bought at a low price. If the horse doesn't work out, people understandably get disappointed, and some get angry.
In the Old West, the recourse for a purchaser who felt cheated in a horse deal may have involved a gun; today it may involve a lawsuit. Problems over horse sales are best avoided. Whether the purchaser succeeds in getting a return of the money or not, the lawsuit will be expensive for both sides with uncertain outcomes. A seller needs more than an “As Is” disclaimer for protection.
The first thing an attorney may ask for when a client comes looking to sue the seller is the bill of sale. The wording of the bill of sale will be analyzed by the attorney and will be a significant factor in his or her recommendation about the chances of suing successfully. A well-drafted bill of sale may help to avoid a lawsuit from being filed and may help to provide a successful defense.
Sold “As Is” is effective to protect the seller and prevent any warranty or representation from attaching when selling “used goods” under the Uniform Commercial Code (UCC). However, horses are not considered used goods, although maybe they should be. When a horse is simply sold As Is, warranties still attach. The seller can still be liable for money damages if the horse becomes lame or fails to perform. Warranties can be both express and implied.
Implied warranties apply to horses. All sales of goods the carry the implied warranties of Merchantability and Fitness for a Particular Purpose. Unless a seller clearly and expressly disclaims these warranties in the bill of sale, they attach and create representations that may allow the purchaser to challenge the sale afterwards. Adding “without warranties” and “without representations” may not protect against the implied warranties and the disclaimer limited to “express” warranties only.
The Warranty of Merchantability is an implied promise that the horse sold is “merchantable” and reasonably conforms to the buyer’s expectations. If a horse becomes lame after a sale and cannot be sold, the warranty of merchantability may allow a purchaser to undo the sale. If the horse fails to live up to the purchaser’s expectations, the warranty of merchantability may again allow a purchaser to get their money back. The seller could even be held liable for an unsoundness issue unknown at the time of the sale, because it impedes the merchantability of the horse for a future sale.
The Warranty of Fitness for Particular Purpose is an implied promise that the horse will be suitable for the purchaser’s intended use. Unlike a typical consumer product, horses change from day to day and from rider to rider. A horse suitable today for a particular use may not be tomorrow if there is a change in training and management. If the horse fails to perform as intended, the purchaser may have an avenue to get money back. So, conspicuous, express and separate disclaimers of warranties for Merchantability and Particular Purpose are prudent.
The Opportunity for Independent Pre-Purchase Evaluations should be reflected in the bill of sale. This helps avoid and successfully defend against a lawsuit. The bill of sale should provide that the purchaser had an opportunity to have an independent veterinarian evaluate the horse prior to the purchase. It should also include that the Seller makes no representation on the suitability of the horse for the purchaser and that the purchaser had her own trainer/agent advisor. These two provisions help the seller defend an accusation of not disclosing prior injury issues or failing to sell a suitable horse.
While there is no bullet-proof language that can prevent a lawsuit when a horse does not work out, one can lessen the chance by addressing these issues.