Unfortunately, a common issue in the horse industry is fraud or concealment in horse sales. It's your duty as a buyer or seller to understand equine law in horse sales to ensure that everything that is going on is within the federal laws and laws set forth by the individual state in which the transaction is taking place.
Many people are unaware that just because you sell a horse "as is", does not mean they cannot be sued. If a seller or lessor does not disclose known problems, then they can later be sued by the buyer. In California, the owner of a horse has a duty to tell the buyer everything they know about the horse and must disclose "important facts" before the sale is complete. These important facts can include the horse's health, soundness, and temperament. Under California law, liability for fraud arises if a seller misleads a buyer, fails to disclose an important fact that couldn't have been discovered by the buyer, or actively conceals an important fact.
Duties As a Seller
It's also important to know about the duty to disclose if you are a seller. In order to protect yourself to the fullest extent, you need to be sure to put your disclosure in writing and to make sure the buyer acknowledges that they have read your disclosure, in writing. Oftentimes, an over-enthusiastic agent may try to convince you to leave out some important facts in order to make a quick sale, so it's important that you go through the buyer as well as the agent.
Things to Look For As a Buyer
If you're a buyer, it's important to demand records and ask any question you can think of. Be sure to view medical records, including every veterinarian who has treated the horse, view insurance records and obtain a release to see if there were any medical claims made. Obtain performance records regarding shows or racing to take a look at gaps between races or shows – have these records verified by tracking down a show photographer to ensure the horse in the records is the horse you are looking to buy.
No matter if you're a buyer or seller, it's important to protect yourself from a lawsuit by being completely honest and documenting everything from the sale. Contact a lawyer experienced in business law and equine law in order to ensure you are doing everything on your part to make a successful and legal sale.