Sale of sporthorses – deficiencies of a horse & contracting tips
5 March 2018
by Glenn L’hoëst
Equestrian sports (“horse riding”) has evolved as a worldwide popular sport, with the Belgisch Warmbloedpaard (BWP) vzw holding the number one position on the WBFSH / Rolex World Ranking list of studbooks in showjumping.
Many of Europe’s biggest horse trading companies are based in or close to Belgium, selling horses within Belgium and exporting the best sport horses to i.a. Asia, Middle-East. Through its sports competitions, trading businesses, and leisure components, equestrian sports have a large economic impact on the Belgian economy, resulting in the highest horse per capita factor of Europe.
However, in the kingdom of (professional) horse trading, old commercial uses reign. Although horse trading has become a huge industry in which horses are sold at record prices, the transfer of ownership of horses is still done without a detailed written agreement which sometimes has negative consequences.
Animals in general, and horses in particular, are no standard “products” of which the validity and reliability can be checked against certain specifications. This problem can partly be defused by investigating the horse as if one would perform a due diligence for a share sale: i.e., medical records of the horse are to be checked, a thorough clinical and radio graphical veterinary inspection and a trial period are to be considered.
Many questions are raised whenever a horse, after the sale, does not meet the expectations or requirements of the buyers. To what extent are buyers of a sport horse able to start judicial proceedings to claim an indemnity or even to annul the purchase of such horse?
The answer depends on the capacity of the buyer as consumer or professional buyer. This distinction is not always straightforward and often the subject of extensive judicial proceedings.
- 1. A buyer qualifying as a professional buyer
In case the buyer does not qualify as a consumer, the buyer will in principle not benefit any specific legal protection. However, an ancient law of 1850 concerning redhibitory defects by horses, donkeys, hinnies, mules, cattle, and sheep, combined with a Royal Decree of 1987 pertaining to redhibitory defects pursuant to the sale or exchange of domestic animals, does provide some principles. Unfortunately, this legislation does not reflect the important economical role of horses and severely limits the annulment claim period (i.e., maximum thirty days as from the delivery of the horse) and annulment grounds through an exhaustive list of hidden defects (i.e., (1) malleus and (2) equine infectious anemia). Hence, the “default” legal protection of the professional buyer of a horse is fairly limited.
The solution, however, is simple. Most of the post-sale problems and deficiencies of a sport horse can be prevented by executing a detailed written sale agreement. Such an agreement can include i.a. a trial period, representations and warranties pertaining to the medical condition of the horse, the capacities and sports results of the horse, and stable deficiencies.
It is also perfectly possible to split the sale price into a fixed part and a variable part. Such variable part can be tied to the fulfilment of certain conditions and calculated on the basis of the health and results of the horse as a sport horse or as a breeding horse.
- 2. A buyer qualifying as a consumer
To qualify as a consumer benefiting from consumer protection (Wet Consumentenkoop art. 1649bis – 1649octies BW), the horse must be sold by a professional trader to a non-professional buyer for non-professional purposes.
Consumer protection creates a two-year guarantee period, during which any non-conformity of the horse as compared to the agreement of the buyer and seller, existing at the time of the sale (principle of anteriority), will be considered a (latent or hidden) defect of the horse for which the seller is responsible.
The qualification of a buyer as a consumer and the demonstration of the principle of anteriority is often fraught with difficulties, resulting in extensive litigation. Also, in the case of consumers it remains, in our view, important to enter into a detailed written agreement to prevent legal uncertainty and protect the interests of the buyer of a horse.
We strongly recommend the legislator to either (i) adopt updated legislation, providing for the most commonly occurring deficiencies or using a non-exhaustive list of redhibitory defects (following the example of the Netherlands), or (ii) to abolish the Law in its entirety and apply general trade legislation to the sale of horses both to professional buyers and consumers (following the example of Germany).
For more information relating to the drafting and negotiation of a written agreement pertaining to the sale or purchase of a sport horse, you can reach out to the author of this article.