Bill of Sale Requirement Turned Down by USEF: Why It’s Needed

At the U.S. Hunter Jumper Association (USHJA) Annual Meeting held on December 8-12th, 2013 in Atlanta, Georgia, the USEF was presented with a few rule change proposals, one of them being a required written bill of sale. This rule would have subjected any USEF member in violation to the penalties of the USEF found in Chapter 7 of the USEF Rule Book which could include forfeiture of prizes, revocation of licenses, and censure, suspension, or expulsion from the organization – meaning the violator could never again compete or be employed within the USEF.equine law

In a change to GR702.1n, the RCP reads “a written Bill of Sale and Agency Agreement must be executed by all principals (buyer, seller, lessee, lessor, etc.) and their duly authorized agents (trainers, coaches, etc.) and distributed to all principals involved in an equine sale or lease.” The proposed rule required the bill of sale to also identify the full sale or lease price of the horse, the names and addresses of the principals, the names and addresses of the principals along with any authorized agent, and a disclosure of any commissions to agents in excess of $500.

Unfortunately, the proposal was withdrawn at the USHJA Board of Directors meeting on December 13th. The rule was vigorously opposed to by certain members of the USEF, which mostly included trainers and sellers of horses. The intent behind this rule change was to, “define agent (trainer, etc.) responsibilities in an equine transaction and thereby establish a standard business practice in sales and leasing. The establishment of a standard practice in equine transactions will contribute to trust and confidence in the sales experience through transparency. Stronger confidence in the process will increase owner retention and entry into our sport.”

Currently, the FTC is the governing body to enforce consumer protection in connection with the sale of horses while three states, including Kentucky, Florida, and California, have enacted state consumer protection statutes directed to equine sale transactions. These statutes require the disclosure of an agency relationship, commission, and whether the agent is a “dual” agent. These statutes also require written bills of sale for equine sale transactions. If violated, substantial remedies to the injured party (typically the buyer) are awarded.

Over the last fifty years, the number of equine law cases litigated in state and federal courts over disputes in the sale of horses has increased. Common claims against the seller include fraud in the inducement of the sale contract, fraud against the principals of the seller, breach of contract, breach of the covenant of good faith and fair dealing, violations of the Uniform Commercial Code, rescission, and negligent misrepresentation of fact. By enforcing a bill of sale within the USEF, more people are likely to obey due to the substantial potential consequences of violating the rules set forth.

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