The law regards the purchase of a horse as being a purchase of an unknown quantity. As a general rule the principle “caveat emptor” (“let the buyer beware”) will apply and, therefore, the buyer will ordinarily be responsible for checking the quality and suitability of the horse before purchasing it.
As to whether the seller of a lame horse is liable will largely depend on the terms of the contract and what was said at the time when the contract was entered into.
Under English law an agreement for the sale of a horse will include both “express terms” (those terms which were specifically agreed between the parties) and “implied terms” (terms implied by law or trade conduct).
It will be an express term of sale that the seller will sell to the buyer the horse and that the buyer will pay the seller an agreed amount for the horse. Frequently nothing more may have been said by the parties at the time when the agreement was made. However the law may imply terms into the contract, for example, by the Sale and Supply of Goods Act 1994. For B2B contracts and The Consumer Rights Act 2015 for consumer agreements
The Sale and Supply of Goods Act 1994 implies into a contract for the sale of goods in a B2B agreement certain terms as to the quality of the goods being sold where such goods are sold in the course of a business. However, in the case of the sale of a horse because the purchase of an animal is an unknown quality a Court may be reluctant to imply terms as to the quality of the horse, unless a defect is known to the seller or is very obvious to the seller.
Where a seller sells animals in the course of a business and if an animal is sold for a particular purpose and that purpose is made known to the seller before the agreement was made and the buyer relied on the skill and judgment of the seller, then it will be an implied term of the agreement that the animal was reasonably fit for that purpose. A lame horse is not fit for the purpose of being ridden and, therefore, if the buyer made it clear that they wanted a horse for riding purposes the seller may be liable.
If prior to a contract being made the seller makes representations or statements as to the temperament or condition of the horse, the seller will only be bound by statements that amount to a term of the contract and will not be bound by mere “puffs”. As to whether a statement amounts to a contractual term depends upon the specific facts of each case. If a great deal of importance has been placed on the statement by the buyer at the time of the contract, or if the buyer relied on the skill and judgment of the seller then the seller is more likely to be bound by the statement.
If the seller breaches one of the terms of the contract. What rights does this give the buyer?
The terms of a contract are classed as “conditions” and “warranties”. A condition is a term, which goes to the very root of a contract. Where a condition is breached the contract is said to have been “repudiated” (brought to an end) and the other party will be allowed to discharge the contract and, if appropriate, bring a claim for damages. A warranty is a more minor term and if breached will enable the other party simply to bring a claim for damages.
Whether a term amounts to a condition or a warranty will depend upon the facts of a particular case.
Under The Sale and Supply of Goods Act 1994 terms relating to quality are regarded as being conditions where goods are sold in the course of a business.
A seller is not liable for any “patent” defects. A patent defect is one which is so obvious that the purchaser should have seen the defect himself before the agreement was made. If therefore, it was obvious that the horse was lame when it was purchased the seller will not be liable for the lameness.
What rights does a buyer have if the seller misrepresents the condition of the horse?
If the seller makes a false statement of fact in relation to the horse and that statement induced the buyer to enter into the contract, then the buyer may have a claim for damages against the seller for misrepresentation. In such circumstances a Court may order the “rescission” of the contract. Rescission has the effect of unmaking the contract and thereby putting the parties back to the position in which they were before the contract was entered into. The Court has the discretion to order rescission and there is no automatic entitlement to it.