Equine Sales Contracts

Buying or selling a horse or pony is an exciting moment full of the promise of what you hope will follow. However, it is also a moment where there is significant risk to both buyer and seller. A well-drafted sales contract should allocate that risk appropriately between the buyer and seller, with the welfare of the horse at its heart.

What is a Sales Contract

A sales contract in its simplest form is written evidence that a buyer has paid, and the seller has received, an agreed amount of money for a specific horse.

A sales contract should include the following key points:

• Address and contact details for both the seller and buyer

• A full description of the horse, including microchip and passport numbers and any identifying features

• If a deposit is to be paid for the horse, the amount and the terms of the deposit (i.e., in what circumstances can it be returned)

• The amount of money to be paid for the horse

• The agreed time at which the sale price is to be transferred, and therefore ownership of the horse passes from the seller to the buyer. This may not be at the time of collection unless the transfer can be simultaneous.

• Details of any trial and pre-purchase veterinary inspection of the horse

• Information about any specific management needs the horse has, as disclosed in conversation during the trial process

• Details of any pre-existing medical issues

• Confirmation of when the horse is to be collected, and when the risk of ownership of the horse transfers to the buyer

Why Should a Buyer Ask for a Sales Contract

For a buyer – whether buying from a professional seller, or otherwise – the sales contract provides a clear record of a number of matters:

• When the horse formally passes into the buyer’s ownership, and therefore when their insurance cover for the horse should commence

• The price paid for the horse, and full identity documents for the horse

• A written disclosure of any specific matters that the buyer may wish to be aware of about the horse or its temperament, such as “requires sedation for clipping” or similar

• A written record of the trial and pre-purchase veterinary examination process, to which any notes on the veterinary report can be included

Why Should a Seller Provide a Sales Contract

From a seller’s perspective, whether professional or otherwise, the sales contract provides a clear record of the buyer’s opportunities to trial the horse, and a note of the vetting process. It allows the seller to specify any warranty they are willing to give for the horse, and further note any specific issues pointed out during the trial process in relation to the horse, such as any pre-existing medical issues or issues surrounding its temperament.

It also clarifies the time at which the horse changes ownership: a buyer may not be able to collect a horse immediately, however if the horse is sold it becomes subject to the new owner’s instructions and requirements, and the new owner should be liable if there is any problem affecting the horse.

Bespoke Arrangements

A sales contract may also be tailored to specific bespoke arrangements, such as when a horse is either sent to a prospective new home before the sale is complete, whether on a short trial, loan with a view to buy, or lease followed by a sale. In each of these situations it is important to agree the key terms of sale at the outset – such as the price – and further document which party is responsible for any injury to, or problem with, the horse during the period of trial, loan or lease. Both parties should also agree and record circumstances where the horse can be returned, or should be regarded as sold. Key areas to consider include – what happens if the horse goes lame, or if the buyer deems it unsuitable?

Deposit Arrangements

If a deposit is to be paid to reserve the horse pending further trial or veterinary inspection, a sales contract should be entered into at the same time as the deposit is paid. The contract should set out clearly the circumstances in which the deposit could be returned (such as if the horse fails the veterinary inspection), and set out the circumstances where the deposit may not be returned – for instance, if the buyer simply changes their mind. Where the sale is conditional on the satisfactory completion of a veterinary examination, it is prudent to include terms requiring the buyer to make their decision whether to purchase promptly, and obliging the buyer to share a copy of the veterinary certificate with the seller if they choose not to proceed with the purchase.

International Sales Arrangements

If you are buying a horse from outside the UK, or selling a horse to a buyer domiciled outside the UK, there are some important additional considerations.

- Ownership and Risk. It is crucial to be clear on exactly when ownership of the horse changes hands, to allow the buyer to insure appropriately. This is usually before any transport takes place, meaning that any injury to the horse during shipping is not the seller’s responsibility. If there is a delay between exchange of ownership and shipping (for instance where a horse is waiting for a space on a flight), the buyer and seller should agree the terms for the interim care of the horse, and the seller may wish to charge livery.

- VAT and Customs Duties. Following Brexit, and notwithstanding the Trade and Cooperation Agreement, VAT may be chargeable on any horse subject to permanent import or export from the UK. This is in addition to any other costs of shipping and may be up to 20 per cent of the purchase price. The buyer and seller should agree who is responsible for payment of any such additional costs at the time of sale.

Final Thoughts

To conclude, while buying a horse is both exciting and risky, a well-drafted sales contract which covers every aspect of your agreement is a sensible investment, whether buying or selling. While pro forma documents are available, an agreement tailored to your specific circumstances is advisable, particularly in current times where some of the applicable regulations are likely to change quickly. Please note that this article is correct as at the date of publication, however no assurance can be given as to the accuracy after that date.

Jodie Seddon is a Partner at Aria Grace Law CIC and an international showjumper and eventer running Stonehill Sport Horses. Her extensive knowledge of both the sport horse industry and the law combines to provide sound commercial advice for all equestrian clients. She can be contacted directly at jodie.seddon@aria-grace.com or 07919 374 324.

Links - https://stonehillsporthorses.com/