Exam S
Test your knowledge of equine law. by Attorney Krysia Nelson
Just How Bad Is It?
ometimes when people call me requesting I review or draft a contract, I simply have to advise them that the transaction they envi- sion is just a bad deal. While the law doesn’t pro- tect people from making a bad deal, it is my job as a lawyer to try to keep them from making bad choices. Sometimes they heed my advice; some- times they don’t. Here are two examples:
Delayed Gratification Amy has found the “perfect” horse for her daugh- ter to show next year. “Max” is currently show- ing with his owner, a junior rider, and is slated to compete in the year end championship shows. His rider has had a very successful year, both with Max and with another horse, and the general consen- sus is that she has a real shot at winning at finals. If she does, Max will be worth several times his cur- rent asking price. Amy feels that now is the time to snatch him up. There is, of course, a catch. The championship
shows are several weeks away and while Max’s owner wants money for him now, she also wants to keep him so her own daughter can show him at the championships. The trainer representing Max’s owner has proposed a contract whereby Amy buys Max now, his owner gets to show him, and they turn him over to Amy after finals. Amy has had him vetted and he is currently “very sound,” according to Amy’s vet. What if he gets hurt be- tween now and finals? The trainer has suggested that she can have him vetted again after finals and if he is “too lame to be ridden,” then the sale will be rescinded and Amy will get her money back. What could go wrong? Almost everything. First of all, Amy’s vet has reported that the
horse is “currently very sound,” but that could change in a heartbeat. Second of all, there is a big difference between the horse being “very sound” versus “too lame to be ridden.” For example, a horse can have a suspensory injury that is not (yet) making it limp, but will eventually require a sig- nificant period of rest and rehabilitation. Further- more, Amy’s daughter will want Max to be sound
90 March/April 2017
enough to compete, and not just walking around the ring under tack. And who gets to decide what constitutes “too lame to be ridden?” Is Amy’s vet going to be willing to stick out his or her neck and possibly squelch the deal? Probably not. But even if the parties were to agree on more
definitive language, and even if there was a veteri- narian who was willing to protect Amy’s interests in this transaction, the whole idea of the money back guarantee is pretty risky. Based on my expe- rience, Max’s owner is not going to volunteer to give back any money. Think about it: she wants to sell Max at a “discount” before she is done needing him. That tells me that she needs cash now—so whatever money she is counting on getting out of Max has probably already been spent and you can’t squeeze blood from a stone. But even if the money is there to fight over, how much would Amy have to spend in legal fees to sue to get the refund to which she might be entitled? Then there is the unanswerable question of whether this is really a good deal for Amy. Yes, Max might be worth more after finals if he carries his owner’s daughter to victory. But what if things don’t go well? Arguably, not only is there a chance that he could be injured during the next few weeks of competition, but there is a chance that he will not perform up to expectations and then his value might be even less than what Amy has already agreed to pay. Deals like this are not that uncommon, and I
am frequently surprised that people don’t recog- nize the risks involved. Fortunately, Amy followed my advice before closing the deal. To make the decision seem even better in hindsight, Max mis- behaved at finals and as a result, his value plum- meted.
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