Buying – Selling a horse, the usefulness of a contract

Buying or selling a horse is not trivial; it is important to understand the legal framework in order to grasp the issues and consequences for both the seller and the buyer.

The sale of equines is governed by the provisions of Article L 213-1 of the Rural Code, which constitutes the common law.

"The warranty action, in sales or exchanges of domestic animals, is governed, in the absence of contrary agreements, by the provisions of this section, without prejudice to the damages and interest that may be due, if there is fraud."

The sale of equines is primarily subject to the provisions on redhibitory defects, unless an agreement to the contrary subjects the contract to another regime, or there has been a defect in consent.

We will see, however, that the courts have a very broad view of the contrary agreement, particularly when there is no written contract.

Finally, it is highly recommended to obtain, before any acquisition, a transaction expertise established by an equine veterinarian chosen by the buyer.

Just like a car's technical inspection, the "purchase visit" or transaction expertise provides a health assessment of the horse before its purchase. Its scope will essentially depend on the intended use.

The veterinarian will best advise the buyer on the scope of the examination. It allows the buyer to purchase with full knowledge of the horse's physical condition. It is essential, and some courts have criticized the buyer for not having such an examination carried out, rejecting their request to cancel the sale.

It is not exhaustive, however, and does not allow for the detection of all the horse's defects.

 

 

• Redhibitory defects.

 

The Rural Code only provides a limited list of defects that can give rise to annulment, and the court of the animal's place of residence must be seized within 10 or 30 days of the sale in order to appoint an expert.

The listed defects that may lead to the annulment of the sale are:

• Immobility (incoordination of the locomotor system, for example)
• Pulmonary emphysema,
• Chronic roaring (characteristic noise during inspiration due to paralysis of the laryngeal dilator muscle)
• The actual tic with or without tooth wear,
• Intermittent old lameness,
• Isolated uveitis, (30-day period for resolution of the sale)
• Equine infectious anemia (30-day period for resolution of the sale).

The Rural Code limits actions to annul a sale to these cases defined over a century ago, which are now outdated.

Veterinary medicine has evolved significantly; immobility and intermittent lameness, for example, no longer have real significance from a veterinary perspective.

In practice, there is little litigation, given the complexity of the procedure which requires urgently seizing the president of the Judicial Court within 10 or 30 days depending on the defect in order to appoint a veterinary expert. This strict deadline runs from the delivery of the equine.

Using transaction expertise can be useful as it allows them to be detected before the sale.

The advantage of this mechanism lies in the fact that as soon as the expert identifies one of the mentioned defects, the sale can be annulled by a court decision.

 

 

• The contrary agreement

While the guarantee for redhibitory defects cannot be excluded, the rural code allows, by agreement, to go beyond what is provided for in Article L 213-1.

The judges indeed have a broad interpretation of the notion of contrary agreement, going so far as to admit the absence of a written document.

Case law notably admits as evidence, exchanges by email or SMS, mentions appearing in the veterinary transaction expertise, and also the sale price of the horse and even the sale advertisement.

In the presence of an implied contrary agreement, the provisions relating to hidden defects of Articles 1641 of the Civil Code apply.

In this case, it is up to the buyer who wishes to obtain the cancellation of the sale to demonstrate that the defect existed before the sale, was hidden, and made the horse unfit for its intended purpose.

In the context of the cancellation of a sale, the quality of the parties is also essential insofar as the consequences of the cancellation will not be the same.

Thus, in the context of a sale between a professional and a consumer, the professional seller, who is presumed to know of the hidden defect, will not only be ordered to reimburse the sale price, but also all expenses incurred for the maintenance of the horse, including board if it is housed in an equestrian center or a private stable.

In practice, due to the duration of the proceedings, the amount of damages can quickly represent a sum equivalent to the purchase price of the equine.

If the sale took place between two individuals or two professionals, the penalty will consist of a simple refund of the price and the return of the horse, unless it is proven that the seller was aware of the defect and deliberately concealed it.

Because the buyer may have become attached to their new companion, they also have the possibility of bringing an estimatory action allowing them to keep the equine and obtain a reduction in the price, sometimes with additional damages, particularly if the horse requires long-term care.

In summary, in the absence of a written contract, judges will consider all pre-contractual elements, particularly all exchanges between sellers and buyers.

It therefore seems essential to provide for a contract, which contrary to what is commonly accepted by professionals in the sector, will be much more protective for them and will avoid any risk of litigation.

The seller may also undertake to guarantee the buyer against hidden defects, but the written contract will take care to inform the buyer, especially if it is an individual, about the horse's abilities, and above all may highlight that the buyer did not wish to consult a veterinarian or a professional for their purchase.

Furthermore, the contract may provide for any other type of guarantee, in particular the repurchase of the horse under certain conditions for a period determined by the parties with or without a price reduction; contractual freedom applies in this context, provided that the redhibitory defects as provided for by the Rural Code are guaranteed.

 

 

• Fraud (dol)

Fraud is defined by Article 1137 of the Civil Code:

"Fraud is the act of a contracting party obtaining the consent of the other through maneuvers or lies.

Also constitutes fraud the intentional concealment by one of the contracting parties of information that they know is decisive for the other party.

Nevertheless, the fact that a party does not disclose to its co-contractor its estimate of the value of the service does not constitute fraud. »

The last case provided for by the rural code is that of fraud, which allows the sale to be annulled when the seller knowingly concealed or omitted to give important information to the buyer that would have been decisive for their consent.

However, it is for the buyer to prove that the seller was aware of this and that this information was decisive for his purchase.

For example, hiding from the buyer that the horse has been operated on for colic or that it has undergone an operation related, for instance, to osteochondrosis pathology could lead to the cancellation of the sale.

Finally, like any agreement, the sale of equids remains subject to common law, particularly regarding defects of consent (error as to substantial qualities, duress) and the seller is subject to a reinforced information obligation when they are a professional and the buyer is a consumer, even a very informed one.

Very recently, the Bordeaux Judicial Court criticized the seller for not informing the buyer that, due to its genetics, the mare could only have a very strong temperament requiring regular daily work.

 

 

• Accessories of the sale

At the time of sale, the seller must provide the buyer with the horse's identification document and its registration certificate, commonly called the owner's card.

While the identification document must be mandatorily handed over as it must accompany the horse in all its movements, the delivery of the registration certificate may be deferred until full payment for the horse.

Finally, since December 31, 2022, pursuant to the law of November 30, 2021 on animal welfare, any seller of an equine must require the buyer to present the "Certificate of Commitment and Knowledge" of the person who will be the horse's keeper.

The horse's keeper is the person who will house the horse. If it is a professional, it will be a simple certificate in which they specify either that they hold one of the diplomas allowing them to teach, for example, or that they have more than 18 months of experience in direct contact with equines.

However, the individual holder must obtain this certificate from authorized bodies, often after training.

For the most part, these organizations are those that bring together users such as the FFE, the SHF, the National Horse Group, the SFET, France Galop... Veterinarians are also authorized to issue said certificate.

Any person who sells an equine without ensuring that the new holder holds the Certificate of Commitment and Knowledge is liable, in the event of an inspection, to a fine of the 3^rd class.

In summary, to secure the sale of an equine, it is recommended to establish a written contract that will precisely determine the guarantees owed by the seller, either by increasing the scope of obligations arising from redhibitory defects alone or by limiting them to those defects.

Macfarlanes LLP and its brand EQUICONSULT dedicated to the equine sector are at your disposal.