Horses can be very valuable assets. They come with inherent risk, however, and are subject to many variable factors. That is why transactions involving horses should be agreed in as much detail as possible at the outset. Spending time managing everyone’s expectations and clarifying exactly what terms have been agreed minimises the likelihood of expensive and time-consuming disagreements later on. It helps to protect your valuable assets and preserve important relationships.

Here are some of the key points to consider when entering into these three common types of agreement.

Horse sale and purchase agreements

“Buyer beware”
A seller does not have to disclose issues to a buyer but must not mislead them, which is known as making a misrepresentation. Accordingly a buyer should make specific enquiries in relation to any issues that are important to them. A seller must reply honestly and accurately to any enquiries made.

The agreement should contain a detailed description of the horse’s physical characteristics, name, age and any previous injuries. A buyer should think carefully about exactly what it wants a horse to be able to do. By making enquiries about a horse’s experience, temperament and suitability for certain activities or styles of play, both parties can find a good fit and avoid disappointment or disagreements. Any vices such as issues with loading or travelling can also be addressed and factored into the price.

Depending on whether a seller is a dealer or a private individual not carrying on a business, there are protections available through the Sale of Goods Act 1979 or the Consumer Rights Act 2015. These include rights to the horse being of satisfactory quality, fit for purpose and to reject a horse after it has been purchased in certain circumstances.

Livery agreements

The agreement should state what type of livery will be provided: full, part or working. It should set out the scope of services included in each type, the duration of the agreement and cost per week or month. The scope of services might include how much a horse must be exercised and how often, how many days per week an owner will have exclusive use, the experience and type of rider whom it can be rented to, any vices or other issues to be managed and the division of responsibilities in part livery.

In case a horse becomes unwell or injured and the owner cannot be contacted, it is sensible to agree in what circumstances a livery operator is authorised to call a vet to provide treatment as well as incur any other medical costs on behalf of the owner, such as transportation to a specialist facility.

A lien is a form of security that allows the livery operator to keep possession of an owner’s horse or related equipment until the owner has paid any outstanding invoices in full. Whilst it can arise automatically for certain horse service providers, it does not do so for livery operators and so should be included in the agreement.

Horse breeding agreements

Breeding can take place either through live delivery or artificial insemination. The agreement should specify which method has been chosen, the identities of the selected stallion and mare and the stud fee.

Both horses should be warranted to be in good general health and breeding condition. This can be evidenced by a report from a vet describing the horse’s health and breeding history, vaccinations record and any other relevant information. It is common to include a right to refuse to breed a mare if she endangers the health or welfare of the stallion, for example if she becomes unmanageable on the day.

If one of the horses becomes unwell or dies shortly before the agreed date, fees could already have been incurred due to the late notice of cancellation and the opportunity to breed could be lost for a long time. This can be dealt with through a right of substitution, which entitles the affected party to use a different horse to the one originally agreed. This right should be drafted carefully to ensure that only suitable types of horses are used that are likely to produce good quality progeny and protect the reputation of each horse.

It is important to agree what rights a mare’s owner has if she does not produce a live foal after she has been covered or inseminated. The parties must decide exactly what constitutes a live foal before then agreeing on any rights to a refund or other attempts.

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