Bill of Sale: What to Include and What to Look Out For

As a disclaimer, one should always consider consulting with a licensed attorney about a purchase or sale contract when buying or selling a horse or pony. This article is not to be considered legal advice. Any questions regarding fact-specific situations should be taken to a licensed and knowledgeable equine attorney.

A sale contract for a horse or pony does not have to be long and complicated to get the job done. There are a few things that should be in every bill of sale. Ensuring your bill of sale has these things in it will protect you and the person with whom you are dealing. It should also be noted that the USHJA discussed a mandatory bill of sale rule at its annual meeting taking place this week.

What should you include in a contract for buying or selling a horse?

The buyer & seller: The buyer and seller of the horse or pony should be identified by full name, address, and phone number. It is also important that the seller listed on the contract is the same person listed on the horse or pony’s registration papers (if it is registered). A discrepancy between the two may cause problems down the road, especially if the sale is contested.

The horse/pony: A full description of the horse or pony should be in the contract. This includes its name (registered name and barn name, if there is one), age, color, markings, breed, a registration number (if there is one), and a microchip number (if there is a microchip). Be sure to be precise about the horse or pony’s description. List any specific markings or scars.

Information about the sale: This includes the sale price and how the price is being paid. If the price is being paid in cash, make sure to specify that. If a trade is being made, specify the terms of the trade and what is being exchanged for what. Sometimes individuals buy a horse or pony and pay in installments. If this method is being used, be sure to note the down payment, how often subsequent payments are being made and the amount of them, and how long the subsequent payments are being made. If installment payments are involved, be sure to specify when the buyer actually takes ownership of the horse or pony and what happens if the buyer fails to complete the payments. Also specify where the horse will be located while the payments are being made and who will have possession of any pertinent papers such as registration papers and medical records. Also be sure to list the date of the sale as well for legal and tax purposes.

Pre-purchase exam: Before I talk about how this should be spelled out in the agreement, please know that it is very important to get a pre-purchase exam. It maybe expensive, but it will save you a lot of money in the long run if you discover any problems before you commit to buying a horse or pony that you may not be able to return in the future if you discover an undisclosed problem. With that said, if the buyer decides not to obtain a pre-purchase exam, this should definitely be noted in the contract. This notation is important as it will protect the seller in the future since the buyer elected not to investigate the horse or pony before he or she committed to purchasing it.

Risk of loss & warranties: It is important to specify when the buyer takes responsibility for injury or death of the horse or pony as well as any injuries the horse or pony may cause in the future. Risk of loss usually passes to the buyer when the contract is signed or when the buyer takes possession of the horse, which may be later than the signing of the contract if installment payments are involved. As for warranties, typically a horse is sold “as is.” This means that the seller does not make any representations or warranties regarding the horse or pony’s future fitness and performance. It is important, also, to ensure that any statements the seller made about the horse orally are in writing, as those cannot be proven in the future if a problem arises. If a seller is representing that the horse is sound, then the seller should have no issues putting that in writing.

Does the buyer need to obtain insurance?: If the horse or pony is being sold using installment payments or if it is going out on a trial period, the seller should insist on obtaining insurance for the horse or pony. The buyer would also be advised to agree to this, as it will protect both parties if anything was to happen to the horse or pony before the trial period was up or before the installment payments are completed.

Attorney’s fees & choice of law: Contracts often will specify who bears the attorney’s fees if a dispute arises. They also specify which laws the party will be sued under. It is most common for the contract to specify that the loser in a potential legal action will pay the winning party’s attorney’s fees. Additionally, if the parties are from different jurisdictions, it is important to specify where the individual will be sued. Laws are different in different states, and something that may come out favorably in New Jersey might not come out the same way in New York or Pennsylvania.

Returns & rights of first refusal: If the seller is willing to accept the horse or pony back after the sale has been completed, this should be put in writing in the sale contract. Specify the terms of any return. While some sellers will accept the horse back and give a refund, others will not. Additionally, some sellers want to make sure that the horse or pony does not end up with someone they have not vetted themselves. While these provisions aren’t always enforceable, it is still a good idea to have them in writing in order to ensure some type of remedy if the buyer sells the horse or pony to a third party without your knowledge or consent. Set out the procedure for this very specifically as well.

Signatures: Any and all parties to the sale contract must sign it. It’s as simple as that.

One thought on “Bill of Sale: What to Include and What to Look Out For

  1. Pingback: Things to Remember When Buying A Horse | the legal equestrian

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