Since writing on this topic in 2015, I have become aware of more instances of a mare (including fillies) being bred after someone has agreed to buy her. So it’s worthwhile to revisit the rights and obligations of the buyer and seller with respect to breeding a mare and flushing embryos after a sale agreement but before the buyer takes possession of her. Crucial to understanding where the parties stand is working out when ownership of the mare passes to the buyer and if the seller has agreed to be bound by any special conditions around fertility and breeding until that time.
In most cases, an agreement is made to sell the mare for a fixed price subject to a fertility examination, the buyer pays a deposit and, if the examination is satisfactory, sometime later the buyer pays the balance of the price (in one or more instalments) and collects the mare. Importantly, it is expressly or tacitly agreed by both parties that the buyer can only take possession of the mare after the seller is paid all money owing. In the eyes of the law, this understanding means that there is no sale of the mare until the price is paid in full because it is only at that point that title to the mare passes from the seller to the buyer. Up until then, there is an ‘agreement to sell’ the mare: The ‘sale’ of her depends on the fertility examination (for the benefit of the buyer) and payment of the purchase money (for the benefit of the seller). A ‘sale’ occurs, from a legal point of view, when title passes. When a ‘sale’ occurs, the buyer becomes the new owner of the horse but not beforehand.
It follows that a ‘sale’ does not occur on payment of a deposit. The function of a deposit is to furnish evidence of the agreement to sell the mare and to serve as a guarantee by the buyer that he or she will pay the balance of the price. A deposit does not trigger a change of ownership. The seller remains the owner of the mare even after payment of a deposit.
The owner of the mare is entitled to breed her and flush embryos from her. For as long as the seller remains the owner, which is the case until he or she is paid the full purchase price, the buyer can not complain of legal wrongdoing if the mare is bred or flushed by the seller.
So if a buyer does not want the mare bred, or her embryos flushed, after payment of the deposit, there must be a term of the agreement to sell binding the seller not do to do so. The term must be in writing, signed by the seller, and be along these lines “On receipt of the deposit, the seller must not at any time, personally or by any agent or contractor, take any step towards breeding the mare, including without limitation, any veterinary examination, investigation, invasive procedure or drug administration relating to fertility or breeding, semen insemination and embryo flush). In default, the seller must immediately refund the deposit”. A fuller clause prepared by lawyer might impose sanctions on the seller in lieu of or supplementary to the return of the deposit. For example. the term might say that, in default, any resulting foal belongs to the buyer. By raising a breeding restriction, the seller might be prompted to voice his or her underlying, but until then undisclosed, breeding plan which can then be negotiated.
As a further precaution, the buyer should also arrange a reproduction vet to examine and test the mare immediately prior to paying the remaining money owing to the seller to confirm that the seller has adhered to these restrictions.
Once the agreement to sell becomes, by the fulfilment of conditions (such as the fertility examination and payment of purchase money) a ‘sale’, it is unlawful for the seller to take any step to breed the mare or embryo flush. The mare no longer belongs to the seller who has custody of the mare on behalf of the new owner/buyer. Intentional interference with the buyer’s ownership of the mare by any means related to breeding would be a serious legal matter entitling the buyer to legal redress against the seller.
8 November 2017
© 2017 Michael Mackinnon, Solicitor & Independent Counsel