Right of first refusal and other ways to keep a SOLD horse "safe"

[kiwichick]

As has been pointed out by a few, you can enforce the breach of contract, but it wont get the horse back, even if they know where the horse is. All they will cop is a fine for breaching contract and if your lucky, your court costs.
Also guess what happens to people that dont pay out on court orders? you have to keep taking them back to court to get a shiny new order. Maybe eventually they go to jail for contempt, but highly unlikely in this case. You can try collection agents and bayliffs, but how far are you going to go to get the 500$ fine they got, you aint getting the horse back either way.

The only way really to stack the deck is to lease it and retain ownership, and even then horses dissappear. This can fall into criminal law (rather than civil - contract breaches) and the perpetrator can be charged with theft. Ive not had a horse stolen, but ive been a victim of theft, and I got a nice letter in the mail to tell me the person involved was convicted. I didnt get any of my money back, the court didnt even order any restitution for the victims. Horses come under property in law, so it would be a pretty exceptional set of circumstances for you to get the horse back this way too, like they still had it with the rest of the stolen property when they were raided.

I dont know why people think they can have their cake and eat it too with horses, ive never seen anyone sell a car and request its returned if unwanted, or sell a house with a buy back clause. Horse people need to understand horses are property under the law. If you sell it, its sold, thats a contract under law, and thats where your control ends.

[IPEsq]

@mzm farm

mmeqcenter
as far as what I’d expect a judge to do is an interesting question. I think as far as property goes, if you buy “stolen” property you have to return it? What would you expect a judge to do if you sold something that was not yours to sell?

Not necessarily. The thing might be considered essentially unrecoverable. You thus might just get some money award to make up for it. However, you’ve got one big difference in your question versus the ROFR clause. The horse being sold is not stolen property. It is the property of the person who sells it to the next person. There is no guarantee you would have bought the horse back. You are just given a seat at the table when the owner decides to sell.

[Denali6298]

@IPEsq

There is no guarantee you would have bought the horse back. You are just given a seat at the table when the owner decides to sell.

This important. Say I buy your horse, and later on down the line I want to sell it to a particular person. There is nothing stopping me for giving you some outrageous number to get you to refuse so my chosen buyer can buy the horse.

[KBC]

What happens if life happens to you OP, and the buyer for what ever reason needs to sell, but can’t make contact with you…can they then go ahead and sell?

[Guilherme]

@mzm farm

For the sake of argument, this is not a defective animal, it is a “high $” horse. Lets get the free lease, keep it, and euthanasia options dropped. Once again, money available to enforce contract.

Is “right of first refusal” clause in contract enforceable in court?

Yes.

Can amount be stipulated and enforced?

Yes to stipulation; maybe to enforcement.

Any other ways to keep a “lifetime” home from being a quick flip home?

I’m sure there are but they all have the same, major flaw. See below.

Please do not share the wisdom of “do not sell/euthanize” those are not options to be discussed here, I am well aware of them. Thank you.

You are in the area of Contract Law. A contract is a legally enforceable document assuming it meets the formalities of the jurisdiction where it was entered into. The only way to KNOW what the requirements are where you will be doing business is to consult a local attorney.

I’m going to stray from your rules and say that money makes the world go 'round in Contract Law and good lawyer will start at $250/hr. and you’ll be expected to make a substantial retainer.

Regarding damages, the recovery that you will receive will be Contract damages, designed to put you where you would have been if the contract had been fulfilled. You will have the burden of proof to establish your loss. In Contract Law there is generally no pain and suffering, no punitive damages, and each party pays its own attorney fees.

There is an area called “liquidated damages.” These are amounts agreed upon before hand between the parties. As long as they are relevant to the contract and not excessive or otherwise contrary to Contract Law they will be enforced.

In some states consumer protection laws might help you out but that will be a long shot. Some also have general “deceptive trade practice” statutes but you’ll need a local lawyer to tell you what is, or is not, available.

G.

[kiwichick]

@mzm farm

mmeqcenter
as far as what I’d expect a judge to do is an interesting question. I think as far as property goes, if you buy “stolen” property you have to return it? What would you expect a judge to do if you sold something that was not yours to sell?

Its not stolen though, you sold it.
Its only breach of contract and that contract is between you and your buyer, not them and theirs. The judge will not question the contract between them.
All you can sue for is breach of contract, the horse is gone.

[Bogie]

@Simkie

Sounds like a good candidate for a paid lease.

There is NO contract that will do what you want, assuming what you want is the horse to go to a home that you specify and never be sold on without consulting you first. That’s not how selling a horse works. You want control, you maintain ownership.

Yup. This is your best option.

[x-halt-salute]

I was once naive enough to think a right of first refusal clause in a sale contract would keep a horse of mine from ever being sold down the river. I was wrong. There’s nothing in a right of first refusal that will get a horse back to you if a new owner decides to breach the contract and sell the horse to a new home. I learned the hard way that neither contract law nor placing horses only with trusted friends is any guarantee that the horse will have a forever home.

If you are lucky enough to find out that the horse is listed for sale before a sale is finalized and have a very good lawyer you might be able to sue for an injunction to stop the sale.

If you find out the horse has been sold after the sale has been finalized, you can pursue legal action to recover financial damages related to the breach of contact (assuming you have the time and money to sue and have a very well written contract). Good luck establishing the monetary amount of any financial losses or any damages that aren’t spelled out explicitly in the contract. And don’t think for a moment that a breach of contract suit would nullify the sale and bring the horse back to you. Contract dispute notwithstanding, that sale is legal and the horse is gone. After all, the horse becomes the legal property of whoever you sell it to even if you have a first refusal clause in the contract.

A long-distance sale can further complicate things, as laws will vary in different jurisdictions and you may have to settle any legal matters in the state where the person you sold the horse to resides, under that jurisdiction’s laws.

People’s lives can change dramatically and quickly, and the long-term welfare of a horse or the barely enforceable first refusal clause in a contract is usually not people’s first priority when unexpected catastrophes befall them. Even good people can make bad decisions about horses when they find themselves in difficult situations, unfortunately.

In my case it wouldn’t have been worth suing the “forever home” friend who breached the first refusal clause – the real loss wasn’t a financial one. I was lucky enough to make contact with the new owner, but in spite of my offer to buy the horse if that owner ever decided to part with her, the horse was sold on again (perfectly legally) to another home and I lost track of her somewhere in Minnesota. It chills my blood to think that she might have ended up in the hands of someone with views like those warriorhorse/tazycat/whatever-she-goes-by-now has espoused above and in other threads about remorseless selling and slaughter.

If you want to be sure your horse doesn’t end up in a terrible home or sold to slaughter somewhere down the line, a lease (paid lease if it’s a high dollar horse) to a home where you can visit regularly is a much better option.

[fordtraktor]

If it isn’t theirs to sell you didn’t sell it to the person. That is a lease.

there is no SAFE way. You can stack the odds but a sale? Right of first refusal? Nope. Maybe you will get damages but if they own it it is theirs to sell. An injunction is incredibly unlikely.

i write my phone # on the papers and state I will take it back for any reason. Which I will. I won’t pay and I may euthanize if the vet reports turn out bad but I will always take them back.

if you want a forever home, provide it yourself.

[CHT]

Last year a client was interested in a big, well priced warmblood, but the seller wanted a “right of first refusal” with the price locked in at the selling price. We didn’t even bother to go look: why would we buy a horse and invest time and effort into training and showing if we couldn’t try to recoup some value down the road? Now if the right of first refusal was at fair market value and transferable if we sold in barn, then I would think of it as a nice safety net if the horse wasn’t working out, or if the client’s circumstances changed. So maybe that is the key: rather than finding ways to threaten the buyer into recognizing the buy back clause, make it so it is to their benefit.

[mzm_farm]

CHT, I can see your point if client was shopping for an investment animal and openly so. Nothing wrong with that. It would be completely different if client got said animal at half price due to a promise of a lifetime home while planning to show and re-sell, different scenario, don’t you think?

[StarPattern]

I’ve sold a couple horses in my life and while I like the idea of a “first refusal” clause, it’s nearly impossible to enforce. Instead, I simply ask the new owner to keep me in the loop should they ever wish to sell the horse. It’s not because I want the chance to buy the horse back, but rather, to know where the horse ends up and watch from a distance. I’m not the type to want to dictate a horse’s life or how it’s used after the ownership changes hands, but I sure love to know how their training is going or if they’re showing talent in a certain arena or even if there’s a chance I’ll see them on the local trails. I love talking to the new owners and providing as much history and insight on the horse as possible. If the owner sells the horse and doesn’t remember or want to let me know, that’s cool too. It’s just nice to know where one of my old horses has ended up.

[retiredhorse]

@mzm farm

It would be completely different if client got said animal at half price due to a promise of a lifetime home while planning to show and re-sell, different scenario, don’t you think?

I can think of a couple things with selling a horse at “half-price” (not saying this is your case, but this is what comes to mind)…

-horse is not sound enough to pass PPE at full price, but whatever is the issue is more tolerable at half-price in case horse does not stay sound
-horse is not easy/amateur friendly enough at full price
-horse has not sold at full price yet, but has “potential” (so if someone puts in the training/showing, they might want to recoup some of their $)
-potential buyer cannot afford horse at full price, so maybe they also cannot afford to retire him in the event that he becomes un-showable (or afford both a retired horse and a show horse); or may be more tempted to sell if someone offers more money than what they bought him for, even if they were not consciously planning it at the time of purchase (I may plan on keeping a horse forever, but if someone seriously offered me the price of, say, my house for him, I’d definitely consider it and would not want to feel obligated to keep a horse due to previous owner’s feelings for him)

As others have said, you sell horse and relinquish all rights, or maybe lease him out for $$. Or you can try to sell (or “sell” for like $1) horse within the barn, hope nothing goes sour with new owner for however long they have the horse, and buy back when they’re done showing him or at least be able to keep tabs on him that way. Still no guarantee though.

I’ve seen fancy horses given away or sold at like 1/10th it’s possible value (or far less than half what horse was previously purchased for, anyway), due to either temperament or soundness issues, to what has so far been a forever home, but they’ve also become better trained or stayed sound in the new situations. As far as I know, the owners are not obligated to keep these horses forever, but may do so, especially if the horses continue to do well or “earn” their retirement with them. I don’t know that previous owners would want these horses back if current owners were to sell them. And these are only 2 or 3 special cases out of however many horses are sold every year.

[CathyB]

Regardless of ROFR, there is really no way to absolutely ensure that the buyers horsemanship meets your standards.

The harse can end up unsafe with the first buyer.

[x-halt-salute]

@retiredhorse

Or you can try to sell (or “sell” for like $1) horse within the barn, hope nothing goes sour with new owner for however long they have the horse, and buy back when they’re done showing him or at least be able to keep tabs on him that way. Still no guarantee though.

Sale to a barnmate or client is really not a very good way to make sure a horse has a good home for life. People leave barns for a thousand reasons and the legal owner of a horse is under no obligation to notify a former owner of their intention to move or the horse’s new whereabouts. The same old contact clauses with the same minimal utility for protecting horses are still all you’d have in such a scenario.

Even a trusted friend, or someone who was essentially gifted a wonderful horse for a nominal pricetag may not, in the end, keep you in the loop about a horse if the situation changes. If the plan is to buy the horse back when it’s show career ends and you want to keep track of the horse in the meantime, why not do a lease to that same barnmate?

A $1 pricetag forfeits not only the value of the horse at the date of sale but also any right to stay informed or prevent undesirable outcomes in the future.

[retiredhorse]

Like I said, it’s still no guarantee and only works if all parties remain happy with the situation/barn/training/horse, and I’ve only seen it with 3 horses & 3 different owners – only 1 so far has retired with BO/former owner, other 2 are still going so their final outcome is still uncertain – out of a lot of sales. I should clarify, I’m not recommending this course of action, only noting that it has been done with very few lucky horses/people. I also mentioned leasing out the horse and retaining ownership (though it won’t work if the other person wants to do A/O division).

Fwiw, I don’t think selling horses needs to be doom-and-gloom, but I don’t think wanting control of horse’s future after it’s been sold is realistic either; it still depends on the other person being ok with selling the horse back for a reasonable price. I think, as previously mentioned, you (general) set the horse up as best you can, with good training and sell to a reputable barn, and hope for the best. And as @CHT mentioned, you can offer to be the horse’s safety net, but also know it’s not a sure thing, if you sell. If you’re going to sell, I would recommend selling horse for full price to a good barn*, or whatever number you’re comfortable with (maybe less to the right person), and keeping tabs on the horse from a distance (or be open to communication/updates from new owner, without pestering them) and offering to buy back if horse comes for sale. If you don’t have to sell…then, don’t?

*I’ve noticed that some barns tend to want to keep good horses – I mean, the horses have to earn it, but when they do, they may get a forever home, or re-sold/leased within the barn; or sometimes sold out of the barn for a while (and they have no control about what happens to horse while it’s owned by someone else) and is bought back, when the next right timing and client comes along. Though, again, no guarantee of nothing bad happening to the horse or that the owners won’t change their mind and sell to someone else or leave.

[OneTwoMany]

@mzm farm

Is “right of first refusal” clause in contract enforceable in court? Can amount be stipulated and enforced? Any other ways to keep a “lifetime” home from being a quick flip home?

As earlier posters mentioned, you can litigate a ROFR clause in a contract if it is violated, but at that point the horse has been sold on. It isn’t clear what remedy/damages you would you seek if the seller had the right to sell the property, and the judge doesn’t have any reason to “undo” the sale.

As for stating a price for RORF, you’ll turn a lot of buyers away with that requirement. Not many buyers will want buy a horse for 2X, put 4X of training into the horse only to be contractually bound to sell the horse at 3X with a right of first refusal clause.

Maybe a better way to approach the situation is to lease the horse out annually. Calculate what funds you would need to retire him when he is of age and put those monies aside from his lease. It almost like the horse is building a retirement nest egg for himself. This way you are assured horse will be “safe”.

It really might be useful to have a phone consult with a equine lawyer so you can be made aware of your state’s laws and various options available to you. It is going to carry a lot more weight if you are getting feedback from a licensed professional. Equine Legal Solution might worth checking out if they are licensed in your state.

[Palm_Beach]

@mzm farm

CHT, I can see your point if client was shopping for an investment animal and openly so. Nothing wrong with that. It would be completely different if client got said animal at half price due to a promise of a lifetime home while planning to show and re-sell, different scenario, don’t you think?

That’s a different question than the original post. So it’s a high dollar horse, or not? Or still high dollar at half price? If it’s that high dollar, then everyone knows it and it will probably always have a home with a show person.

[saultgirl]

I think horses have long lives and there is nothing wrong with them having several owners along the way.

There is no way to keep a sold horse safe, except to give it the best chance possible with good training.

[Simkie]

Selling at “half price” while still placing demands and limitations on the animal isn’t SELLING imo. It may be selling an interest, while retaining one. But it ain’t selling outright.

I’d be surprised if you found many takers there. There’s a huge difference between ownership and part ownership.