Selling and Buying Horses: What Have You Agreed?

Although buying a horse is an exciting prospect for many horse lovers, it is an area that is full of potential difficulties as, in effect, a buyer is purchasing an unknown quantity and it is difficult, if not impossible, to guard against latent defects.  Despite this, many horse purchases are still being agreed on a mere handshake with very little discussion between the parties about their intentions in relation to the sale and purchase.

This article looks at the recent Court of Appeal case of John Palmer v Patricia Muir (2014), which highlights some common issues associated with the sale and purchase of a horse, and looks at what sellers and buyers can do to avoid such issues.

John Palmer v Patricia Muir

This case arose out of the purchase of a horse called Toby by Mr John Palmer in October 2007 for less than £3,000.  The horse became lame, if it was not already, and had to be put down a few months after being purchased by Mr Palmer.

Mr Palmer claimed that the defendant, Miss Patricia Muir, sold him the horse in October 2007 and contended that she was in breach of her contract of sale.  Miss Muir’s case was that she was not the seller of the horse, it had been owned by a Mr Clack, who originally had been a defendant in these proceedings, and that she had negotiated the purchase of the horse as agent on behalf of Mr Palmer.  Miss Muir, therefore, argued that she was not personally liable in this regard.

The nature of the agreement between Mr Palmer and Miss Muir had to be ascertained from the communications between them and their conduct in relation to each other.

Mr Palmer lost the argument after two court hearings.  However, he appealed against the decision that Miss Muir had not sold him a horse that was of unsatisfactory quality and unfit for purpose.  The Court of Appeal have upheld Mr Palmer’s appeal stating that the judge had failed to make appropriate findings of fact and had not addressed the objective position between Mr Palmer and Miss Muir as either agent or seller.  The judge had incorrectly focused on Mr Clack’s view of the sale rather than the position between Mr Palmer and Miss Muir.

Unfortunately, the Court of Appeal did not have the material to determine the matter.  In the circumstances, the appeal was allowed and remitted to the County Court for retrial before a different judge.

The need for clear intentions

The Court of Appeal commented that the case of John Palmer v Patricia Muir was “a very sad case”.  The claim was originally quantified at less than £9,000 and yet the costs of the parties have well exceeded this sum for what is, at the end of the day, a very modest case.  It has been reported that Miss Muir could face a legal costs bill of around £150,000.  Bear in mind that these costs have been incurred over the sale of a horse bought for less than £3,000!

In order to avoid such disproportionate costs, it is strongly recommended that parties have a written contract of sale setting out the terms of the agreement, including any terms which have been agreed as to the horse’s qualities.  Both parties should keep a copy of the contract so that, should a dispute arise, there is evidence of what the parties agreed.  This is particularly important because, should a dispute come to court, it will look to the intention of the parties at the time of the transaction and a written contract will provide good evidence in this regard.

Agent or seller?

As the case of John Palmer v Patricia Muir demonstrates, owners of riding stables or livery yards can find themselves in precarious situations by merely “keeping an eye out” for a suitable horse for a buyer.  Are they acting as an agent or are they classed as the seller?  This depends on the intentions of the parties involved and the specific facts of a matter.

Subject to the facts of each case, owners of riding stables or livery yards are likely to be classed as acting in the course of business or rather acting with ‘some degree of professionalism and regularity’.  If this is the case, a purchaser can rely on certain provisions of Sale of Good Act 1979 namely that the horse must be reasonably fit for the purpose for which it was intended (provided that purpose is made known to the seller) must be of satisfactory quality and must comply with any description given to the buyer. 

A purchaser can also rely on these provisions if a horse is sold to them by an agent and the agent is selling in the course of business – unless the seller, on whose behalf the agent is acting, is not acting in the course of business and the buyer knows that at the time of the sale, or the seller takes reasonable steps to make it known to the buyer at the time of the sale.

Think before acting!

It is, therefore, advisable for parties to be clear from the outset of a sale as to their intentions including their roles and responsibilities associated with the transaction in order to minimise the risk of a dispute arising.  Such intentions should be set out in a written contract.  The John Palmer v Patricia Muir case is a prime example of how a relatively modest breach of contract case can spiral out of control due to the parties not clearly setting out their intentions from the outset.

If you are looking to purchase or sell a horse or have concerns relating to a recent purchase or sale, it is recommended that you seek appropriate legal advice from a solicitor specialising in equine law to assist in addressing your requirements.

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

Kieran Walshe

Partner - Head of Commercial Insurance and Head of Equine

As Head of DWF's Commercial Insurance team I advise on a range of high value and/ or complex litigation matters and misfeasance cases.