Sale of Goods Act applies to horse sales even when a trader sells and an individual buys

Horses sales between two individuals are governed by the Sale of Goods Act, while horse sales from a trader to an individual are governed by the Consumer Sales Act. But who is responsible for knowing which law applies to the sale of a horse? Is it reasonable to apply the Consumer Sales Act to a product subject to change? A recent judgment by the Court of Appeal for Western Sweden takes up the question of where to draw the line between individual and trader in the equine industry.

The case considered whether the person who sold the horse should be deemed a trader, and accordingly, which law should apply. The Court of Appeal for Western Sweden’s judgment found that the seller should be deemed to have sold the horse as an individual despite being a registered trader conducting business operations in the form of pony riding services. Therefore, the Sale of Goods Act (1990:931) was the applicable law in this case.

“The real question of interest here is whether it is reasonable in the first place to apply a law such as the Consumer Sales Act to a product subject to such great change, such as an animal. We now see a trend among horse owners who are also traders where they are becoming increasingly cautious about selling horses to consumers,” Gulliksson Partner Cecilia Tholse-Rogmark comments.

The Consumer Sales Act is clear: A trader is defined as a natural or legal person acting for purposes related to that person’s trade, business, craft or profession. The Consumer Sales Act should not apply when a trader sells a product under such conditions that the person can be considered as acting in the capacity of an individual. Professional riders or high-level riders who believe they are selling a horse privately will often be considered traders instead under the Consumer Sales Act because of sponsorships and competitions associated with economic benefits that have a direct connection with riding. This can lead to risks when selling to individuals who can assert the legal guarantee and proof rules for latent defects under the act.

Cecilia Tholse-Rogmark welcomes the ongoing reviews and proposed changes relating to the trading of live animals and highlights the risks to sellers posed by current practices.

“When a consumer can assert rights under the Consumer Sales Act when buying a horse, the worst-case scenario is not only that the horse can be returned, but also that the buyer can claim damages for costs resulting from the purchase such as stall rent, veterinarian bills and horse feed. The issue is complex, and trading in animals is particularly specialized. In a certain sense, a horse is a product subject to great change and a ‘used product’ regardless of age. Personally, I think it’s a sad state of affairs when horse breeders are unwilling to take the risk of selling to individuals not acting as traders.”

Cecilia Tholse-Rogmark plays a leading role on Gulliksson’s team for equine law, an area in which legal issues relating to sales and damages often are hot topics.

“A contract that’s good for both the buyer and seller stipulates the governing law. Most horse injuries occur within the first six months following the sale, and who is responsible for the costs and burden of proof largely depends on which law is applicable. However, it should be noted that the Consumer Sales Act is mandatory and cannot be contracted away, but the judgment referred to above demonstrates that you can sell a horse as an individual despite conducting horse-related business. This means that the reverse could also be true. In other words, you could also buy a horse as an individual, and the seller could fall under the scope of the Consumer Sales Act despite the buyer seemingly acting as a trader. The consequences of the act’s mandatory rules are currently a great burden for traders.”

Read the full judgement (in Swedish).

Equine Law covers also civil law governing legal issues regarding transactions and indemnity, and also other areas of general business law such as labour law, contract law, company law, mergers and acquisitions, property law, and construction law. We assist our clients in drawing up and reviewing commercial agreements and we also assist in a strategic advisory role for various types of business affected by Equine Law.
Gulliksson handles all kinds of business disputes – in general courts, administrative courts, authorities and arbitration tribunals. We represent clients in negotiations, court procedures, arbitration procedures, mediation, international dispute resolution and alternative dispute settlement. Our experience of processing also extends outside Sweden’s borders and our understanding and experience of equine law is extensive. Gulliksson has many employees who are active in sports in different ways, and within equine especially. Some as participants and others as board members or as representatives in reputable associations.

Contact:
Cecilia Tholse Rogmark, Partner
+ 46 (0)735 195 950
cecilia.tholse@gulliksson.se