Many issues can arise in the buying and selling of horses
The sale of horses is often compared to the sale of used cars, as the vendor generally has a thorough knowledge of the horse being sold, whereas the buyer only has a limited inspection which cannot always bring to light any issues the horse may have.
Caveat emptor is a legal principle that previously applied to the sale of horses, and basically meant “buyer beware”. Buyers had no legal remedies if the horse they purchased was a dud. It was previously upheld in court that when selling a horse, the general warranty requires nothing more than that it is a horse.
This notion has now been rendered obsolete due to the introduction of the Competition and Consumer Act 2010 (previously the Trade Practices Act 1974).
This major change to sale of a horse is likely due to the ever increasing importance of the now multi-billion dollar a year horse racing industry in Australia.
Many issues arise in the buying and selling of horses; it is often not as simple as transactions involving the buying and selling of “usual” goods. This was displayed in the recent decision involving well-known trainer John O’Shea, who was sued and found liable after he failed to disclose that the horse had undergone surgery, and could not be trained or broken in for at least six months.
Mr O’Shea was not found to be negligent or dishonest in his actions; it was a breach of contract due to the fact that the prospective purchaser had specifically asked for a horse “free of any issues” and the horse Mr O’Shea recommended, Dashere, was not a horse “free of any issues”.
The original decision was in favour of Mr O’Shea; the court found that the agreement between Mr O’Shea and Mr Viera, the prospective purchaser, allowed Mr O’Shea to sell the horse even though he was aware of the issues, but thought that they were not significant enough to prevent the purchase.
This decision was overturned on appeal, with the court finding that the basis for the contract between the two parties was that Mr O’Shea would not recommend any horse that was not “free of any issues”. This conclusion was reached after considering conversations between the parties, in which Mr O’Shea stated he would not recommend for purchase any horse which was not free of any veterinary problems.
The specificity of the statements made by Mr O’Shea were most likely his undoing; more general terms could have been interpreted differently by the court.
Courts have not seen very many disputes of this nature. Many horse buyers would simply “cut their losses”, but that would be unlikely if the buyer paid hundreds of thousands of dollars (or more) for the horse. Such litigation is likely to become more common considering the favourable outcome for the purchaser in O’Shea’s case.
