Few people doubt the power of a well crafted advertisement  for the sale of a horse to attract enquiries.  Expressions like ‘bomb proof’, ‘child friendly’, ‘doesn’t put a foot wrong’, ‘easy to catch’, ‘easy to float’, ‘regrettable sale’ are used to lure buyers and are often meaningful to the less experienced horse person. These expressions create a firm impression and expectation of the horse and its temperament in the buyer’s mind and subsequent contact with the seller simply reinforces a conviction to buy the horse without regard to much else.  This is particularly so in cases of buying sight unseen.  But it can happen even when an inspection occurs because the buyer has already made up her or his mind to buy the horse, based on a conviction that every promotional claim about the horse is true and accurate. This buyer behaviour perhaps explains the regrettable reluctance to use a written contract to buy a horse: the advertisement is assumed to be correct so what else needs to be asked or validated?

But if the horse does not live up to expectations, does the seller have to refund the sale price simply because the claims about the horse in the advertisement were false, misleading or didn’t tell the full story?  In private sales (where neither party is in the business of buying or selling horses), there are numerous factors to consider from a legal standpoint before reaching a conclusion one way or the other.  One factor is the content of the advertisement.

Advertisements usually contain a mix of representations on the one hand and expressions of praise, approval and admiration of the horse on the other. Representations are statements of fact, such as the horse is 8 years old or chestnut in colour.  Praise, approval and admiration for the horse are not statements of fact at all, for example, the horse is happy to go anywhere, is not fussed by anything, will put you in the winner’s circle.  Such laudatory statements have no legal significance.  But statements about temperament or behaviour, which are usually highly significant for a buyer, are not always easy to classify as representations or not, such as the horse loves going to competitions or the horse is an all rounder.

A statement of fact which is untrue is a misrepresentation.  Proving a statement was untrue is necessary and might require the involvement of an expert.  If the seller makes a misrepresentation intending the buyer to rely on it, the buyer may have legal rights against the seller if the misrepresentation was relied on.

But here’s the catch: proof of reliance on a misrepresentation is not easy to prove and is essential to a successful legal claim. If the buyer is an experienced horseperson, or inspected the horse, or showed videos of the horse to her or his coach, the seller will point to self-reliance or reliance on the coach to refute reliance on the misrepresentation.

A buyer might assume, given the prominence of the advertisement in her or his decision to buy the horse, that a representation in it actually forms a term of the sale agreement.  But what determines if a statement of fact (representation) is an actual term of the sale? The legal test is whether an objective observer would conclude that the seller intended to guarantee the truth of the statement.  In the sale of a horse various factors might point to a statement of fact in an advertisement being a term of the sale: how close the sale occurred to the publication of the advertisement; what due diligence the buyer exercised; the importance of the statement; and the greater knowledge of the seller to know the truth of the statement made.  The conclusion that a statement in advertising material has contractual force is not, however, easily reached.

An advertisement should be the starting point not the end point of a buyer’s due diligence.  A buyer should closely examine the advertisement and ask the seller to clarify or elaborate and substantiate each thing stated.  If the horse is claimed to be an excellent child’s pony, the buyer must ask the seller to explain why with reference to facts that are verifiable in some way.  The buyer should ask pointed questions – What was the age of the child that rode the horse? Is there a performance record for the horse with a child riding it? Did an adult have to warm up the horse before the child mounted and for how long?  In doing so, the buyer should be able to discern fact from fiction.  Facts disclosed in, or supplementary to, the advertisement which are important to the buyer should be confirmed back to the seller by email or text to demonstrate their significance to the buyer.  If these precautions are taken, a buyer will hopefully make a more informed decision that will avoid the need to consider legal grounds to claim a refund.

17 October 2017

© 2017 Michael Mackinnon, Solicitor & Independent Counsel