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The Importance of an Agreement of Purchase and Sale when Buying a Horse 

There are many responsibilities involved with the proper care and handling of horses. One of the most important responsibilities of horse ownership begins before the owner buys their horse. Horse owners take on serious, long-term responsibilities and huge financial obligations when owning a horse. Therefore, a proper and enforceable agreement of purchase and sale is essential when you are buying a horse. 

An agreement of purchase and sale is a legally binding written agreement that covers the specified cost of the horse and a number of conditions and terms (often laid out by the buyer) that must be met. Agreements of purchase and sale are most commonly used in real estate transactions, but can be used in any significant purchase, such as the purchase of a horse. In many ways, buying a horse is similar to buying a home: a significant, emotional purchase, involving plenty of research, budgeting and money! 

Pursuant to section 15 of the Sale of Goods Act, R.S.O. 1990, c. S.1, there is an implied warranty or condition as to qualify and fitness a horse if the buyer makes it known to the seller the particular purpose or use the horse will be put to. In Robertson v. Leyzac, 2003 CarswellOnt 3831, the defendant sold the plaintiff a horse under the implied warranty that the horse was fit for barrel racing. The court found that the defendant knew that the horse was not sound, and that the plaintiff was entitled to recission of the agreement of purchase and sale. We often see this when sellers misrepresent the horse’s experience, behaviour or ease of use. 

An agreement of purchase and sale can help particularize the terms and conditions of the transaction to ensure clarity for both buyer and seller. There are many terms, conditions, and warranties that can be agreed upon when drafting an agreement of purchase and sale. If there is a problem found by the buyer’s lawyer and the issue cannot be remedied, the transaction comes to a halt. 

The following are common terms and conditions that can be particularized in an agreement of purchase and sale of a horse: 

Pre-Purchase Examination 

Unique to the purchase and sale of horses is the veterinarian’s pre-purchase examination (“PPE”). The buyer’s offer should be conditional on the health, fitness and soundness of the horse, which is determined by a pre-purchase veterinarian’s examination. A PPE is a must for horses of any sizeable value. 

Commissions 

It can take a great deal of time to sell a horse when you consider the advertising, preparation and communication with prospective buyers. Often, sellers and buyers alike hire agents who render services in exchange for commissions. Commissions paid to an agent have proven to be one of the most contentious areas of the horse sale process. Ambiguity with respect to commission can be mitigated through clear terms in the agreement of purchase and sale. 

Post-Purchase Issues 

An agreement of purchase and sale can outline remedies for post-purchase issues, including behavioural problems and ease of riding the horse. Any unstated or misrepresented vices or behavioural problems that occur within a reasonable time post-purchase would give the buyer grounds to discuss the terms with the seller. Unless there are specific representations or warranties in the agreement of purchase and sale, the seller is free from any obligations.  We often see this as being sold “as is” and the seller is making “no warranties”. We want to ensure that both the seller and buyer have equal responsibilities and are mutually fair in the circumstances.   

In order to avoid lengthy and expensive litigation, if a purchase or sale of a horse goes wrong, you should have a knowledgeable and experienced lawyer draft a proper agreement of purchase and sale. This isn’t the time to internet search and take “something” off the internet. You spend a great deal of money on the purchase or sale of a horse; take pride and comfort in ensuring the utmost protection for you, and ride with ease. Contact me for assistance with your next horse purchase or sale! 


This article was written by Personal Injury and Equine Lawyer Louis DelSignore

Dec 06, 2022