Buying a horse should be an exciting time, and it can be equally exciting to see a horse you’ve developed head to a new home. Often, trial periods are used for the potential buyer to try out the horse to make sure they are a good fit – but during this time, things can go wrong.
If the horse is going to be away from its home stable during a trial period as part of the sale process, both buyer and seller should make sure some precautions are in place during that time.
HorseSport spoke to Louis DelSignore, a lawyer specializing in personal injury and equine law at McKenzie Lake Lawyers in London, Ontario. He gave us some insight on best practices for both sellers and buyers when it comes to horses on trial, as well as what your insurance policy should cover.
What could go wrong?
When it comes to horses, an old saying applies that many horse lovers are familiar with: what can go wrong, will go wrong.
There are a number of situations that could occur when a horse is on trial. The horse could injure you or someone else, require vet care or other unforeseen expenses, might not be as advertised, or you might just not be compatible together. Worst case scenario: the horse may get injured or die in your care.
“We know with horses, anything can go wrong,” DelSignore says. “Injury can happen very easily without even riding the horse – the horse can be injured in the paddock or field.”
What should insurance cover?
If the horse gets injured during the trial period, DelSignore says, normally the owner would be responsible for providing medical coverage. The horse should be insured for major medical, mortality and also third-party liability, in case the animal injures someone or damages someone’s property.
The horse should be insured by the seller (if you are the purchaser, be sure to ask!) and if it’s not, the potential buyer should enquire with their own insurance agent about getting those types of coverages for the horse while it’s on trial in their care, especially if it is an extended trial period. Few insurers provide short-term coverage, however. DelSignore suggests you likely would have to insure the horse for a longer period (typically a year), and cancel the policy later on, to obtain the coverage you need.
The pre-purchase examination
The pre-purchase exam is also an important part of any sale, and often the purchase of a horse is contingent on the horse passing this PPE. DelSignore says that the PPE should be thorough enough to cover what your intended use of the horse should be.
“For a trail or pleasure horse, you might not need as thorough a PPE with back x-rays, neck x-rays, or drawing blood that you may require with a horse that’s going to be a significant jumper or hunter horse,” DelSignore says.
Get it in writing
Most of all, DelSignore emphasizes the importance of getting everything in writing via a thorough purchase agreement or sellers agreement. This agreement should be reviewed by a lawyer with knowledge of horses and the horse industry.
The agreement should speak to all of those aforementioned issues that could come up while the horse is on trial, including a failed PPE exam, the horse requiring unforeseen expenses, and responsibilities in the case of an injury to the horse, including if the injury or death is due to negligence on the prospective buyer’s part.
“You want to have a fulsome agreement that covers those responsibilities, and who is responsible for what, and covers those details so that there’s no surprises,” DelSignore says.
When things go wrong
What legal options do both parties have if the situation does, unfortunately, go south?
It depends on what’s in your agreement, DelSignore says. Hopefully, you have a really detailed and thorough contract, where the responsibilities would be clearly laid out.
“Depending on the situation, you can always put a clause in about how and where disputes will be handled,” DelSignore says. That might be through mediation or arbitration, or under the specific law or venue of your province, depending on where the seller and buyer are located.
Cases in Point
As examples, DelSignore cites a couple of horses-on-trial court cases he wasn’t personally involved in.
In the first, Robertson v. Leyzac in 2003, the court found that the defendant sold the plaintiff a horse under the implied warranty that the horse was fit for barrel racing. The court found that the defendant knew that the horse was not sound, and that the plaintiff was entitled to recession of the agreement of purchase and sale. The trial judge awarded the plaintiff $7,500 (the purchase price for the horse) as well as $940 for vet bills, costs and pre-judgment interest, and a further $300 for counsel fees.
The basis of the decision was that according to section 15 of the Sales of Goods Act, there’s an implied warranty of condition as to quality and fitness of a horse if the buyer makes it known to the seller the particular purpose or use the horse will be put to (in this case, the buyer had made it clear that she wanted a horse for her daughters to barrel race on, and the seller knew that the horse was unfit for that purpose).
A second relevant case, Grady v Edwards in 2020, involved a prospective purchaser (Grady) was in the process of buying a horse from Edwards, who was selling on behalf of the horse’s owner. The horse was advertised as “no soundness issues” and one medical issue, which was a navicular condition in the horse’s front feet. Grady took the horse on a five-day trial period, during which she signed a ‘free trial/lease agreement’ in which she agreed to cover all financial obligations for the horse during that period, at her own expense. Grady was initially planning to obtain a pre-purchase exam, but wasn’t able to get it done due to weather conditions. Instead, Grady paid $500 for x-rays to further assess the disclosed navicular condition.
Later, Grady claimed that she learned from the horse’s previous owner that the horse had soundness and aggression issues, and that if she’d known about this at the time, she never would have paid to get the $500 x-rays done. In the end the judge decided that Edwards genuinely hadn’t known about any of the soundness issues or aggression issues (some of which seemed unfounded), and didn’t misrepresent the horse’s condition or history, so therefore Grady wasn’t entitled to reimbursement of the $500 for the x-rays.
By following the best practices of having a thorough written agreement and insurance to cover all that might go wrong during a sale and trial, hopefully any major conflicts and disasters can be avoided. Buyers and sellers should have comprehensive contracts drawn up and look into their options for insurance during trial periods – so that nobody has to go on trial but the horse!