Selling a horse is not always as straightforward as it first appears, particularly when the person negotiating the sale is not the owner but a trainer, rider or agent acting on their behalf.

It is a familiar arrangement within the equine industry. An owner decides to sell and asks a trainer, who knows both the horse and the market, to manage the process. The trainer may advertise the horse, speak with prospective purchasers, arrange viewings and pre-purchase examinations, negotiate the price and, in some cases, receive the purchase funds.

Because the trainer does not own the horse, there can be an assumption that any legal responsibility for the sale rests solely with the owner. The position is not necessarily that simple.

Who is actually selling the horse?

When a horse sale becomes contentious, one of the first things to establish is the role each person played in the transaction.

Ownership is important, but it is not the only consideration. A trainer or agent may have authority to negotiate or make representations on an owner’s behalf. Their own conduct and statements may also become relevant where a purchaser later alleges that the horse was materially different from what was represented before the sale.

For this reason, an agent should understand precisely what authority the owner has given them. Are they authorised merely to introduce prospective purchasers? Can they negotiate the price? Can they agree to terms? What information have they been authorised to provide about the horse?

These questions are best answered before the horse is advertised rather than after a dispute has arisen.

Representations made before the sale matter

Horse sales are frequently negotiated through informal conversations, text messages and social media. The informality of those communications does not make them legally irrelevant.

New Zealand law provides remedies in certain circumstances where a person has entered into a contract in reliance on a misrepresentation. Statements made during negotiations can therefore become important evidence if the sale is later challenged.

Descriptions such as “never been lame”, “safe for an amateur”, “no issues” or “suitable for a junior rider” may appear unremarkable in an advertisement or message. However, each conveys information about the horse and may influence a purchaser’s decision.

Those acting for an owner should therefore distinguish carefully between what they know and what they assume.

Disclosure and the horse’s history

The question of what should be disclosed can be one of the more difficult issues in horse sale transactions.

Horses, particularly competition and racehorses, commonly have extensive veterinary and management histories. The existence of a historic injury or veterinary treatment does not necessarily mean that a horse is unsuitable for sale.

However, if information is known that could materially affect a purchaser’s assessment of the horse for its intended purpose, failing to address it openly can create considerable risk.

A pre-purchase examination remains an important part of the purchaser’s due diligence, but it should not be treated as a substitute for accurate information from those who know the horse.

There is less likely to be uncertainty later when relevant information has been disclosed, the purchaser has had an appropriate opportunity to investigate it, and the terms of the sale are properly recorded.

The significance of acting “in trade”

Additional considerations arise where the person selling or facilitating the sale is acting in the course of a business.

Consumer legislation may apply where goods are supplied in trade to a consumer. Whether a particular owner, trainer or agent is acting “in trade” is a fact-specific question and will depend on the nature and circumstances of the transaction.

Professional trainers, producers and agents who regularly participate in the marketing and sale of horses should therefore be cautious about assuming that describing themselves as an “agent” removes any potential exposure.

The legal position will depend on the transaction itself, including who supplied the horse, who made the relevant representations and the capacity in which each person was acting.

Recording the sale properly

Although a horse can be sold through an exchange of messages followed by a bank transfer, a properly documented agreement is worth considering for higher-value transactions.

A sale agreement should accurately identify the parties and the horse and record the material commercial terms. Depending on the circumstances, this may include the purchase price and GST treatment, deposit arrangements, transfer of possession and risk, the intended use of the horse, relevant disclosures, the pre-purchase examination and any representations or warranties being given.

Where an agent or trainer has been substantially involved, their role should also be clear.

The objective is not to make horse sales unnecessarily legalistic. It is to ensure that, if questions arise months later, the parties have a reliable record of what was actually agreed.

A practical approach for trainers and agents

Selling horses on behalf of clients is an ordinary and valuable part of many equine businesses. The legal risks can usually be managed without making the process cumbersome.

A short written agency arrangement can define the trainer’s authority, identify information provided by the owner, address commission and outstanding accounts, and establish how the eventual sale will be documented.

The horse industry will always operate to a significant degree on relationships and trust. Good documentation does not replace that trust. It helps protect it by ensuring everyone begins the transaction with the same understanding.

Need advice on an equine transaction?

Blackhawk Law advises owners, trainers, agents and purchasers on horse sales, equine transactions, sale disputes and commercial arrangements within the equine industry.

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This article provides general information only and does not constitute legal advice. The legal position will depend on the circumstances of each transaction.