Help!  Seller Won’t Honor Trial Period

by Rachel Kosmal McCart | April 27th, 2011 10:32 AM | No Comments

Q: We recently purchased a horse and wanted to make sure the horse would be a good fit for our needs, so we asked the seller if we could take the horse on a 30-day trial period.  The seller agreed, and we entered into a purchase agreement that specified the contract was “subject to a 30-day trial period.”  We paid the purchase price up front, in cash.  During the trial period, our vet examined the horse and found he has moderate navicular changes.  The horse isn’t lame, but because of the navicular changes, our vet recommended we not go through with the purchase.  So, on day 29 of the trial period, we called the seller to let her know we wanted to bring the horse back.  We called her numerous times and were unable to reach her, so we left her a voicemail.  When we didn’t hear back from her, we followed up with a written notice.  We still haven’t heard from her and it’s been 60 days since the end of the trial period.  Meanwhile, our trainer says the horse isn’t as broke as the seller said, so we really don’t want to keep him.  Help!

A: Based upon the information you provided, the seller is contractually obligated to honor the trial period and take the horse back.  The trial period provision doesn’t appear to be limited in any way (such as by stating you can only return the horse if the pre-purchase results show actual lameness).  Your contract also doesn’t appear to require you to notify the seller via a particular method (such as in writing), so your voicemail left during the trial period was probably sufficient notice.  Because also wisely followed up with written notice, the seller will find it difficult to claim she wasn’t notified.

At this point, it appears the seller is simply ignoring you, hoping you’ll give up and keep the horse.  It also sounds like keeping the horse isn’t a viable option.  So now what do you do?!   Essentially, you have one legal remedy: Suing the seller for breach of contract.

In your lawsuit, you’d ask for rescission, which means putting the parties back in the same positions they were in before the contract, as though it had never happened.  You would also request damages, in the amount of the out-of-pocket expenses you incurred with respect to the horse after day 29 of the trial period, such as board and farrier care.

Going to court is very expensive.  If your case proceeds all the way to trial, your legal fees and costs could easily exceed $50,000.  Unless your purchase contract contains a provision for attorneys’ fees, you will likely have no chance of recouping those costs, even if you win your case.  Depressing, isn’t it?!  Clearly, if your legal fees and costs would exceed what you can sue for, it just wouldn’t make sense to sue the seller, especially if the seller might not have the money to pay the judgment.

So, are there any other options?  One potential option is to sue the seller for breach of contract in small claims court.  Because small claims courts typically don’t have the power to order anyone to do anything other than pay money, you wouldn’t be able to rescind the contract.  But, you could ask the court to award you damages.

How much could you sue the seller for?  The small claims court limit is generally $7,500 or less, and varies by state.  You also have a general legal duty to mitigate your damages (make them as small as possible).  So, if you decide sue the seller in small claims, you should make reasonable efforts to resell the horse as soon as possible, for as much as possible.  Meanwhile, you should do what you can to minimize out-of-pocket expenses related to the horse.  If the horse sells for less than you paid for him, your damages would be the difference in price, plus sale expenses (trainer commissions, ad costs, videography, etc.).  Your damages would also include your out-of-pocket expenses with respect to the horse during the period from day 29 of the trial period through the resale date.

If you’re interested in going to small claims, here are some tips that may prove helpful.  Good luck with your case!


About the Author

Rachel Kosmal McCart is an equine attorney and the founder of Equine Legal Solutions, PC, a law firm dedicated to the horse industry. Rachel regularly represents clients in litigation matters and breed association disciplinary hearings, and also provides clients with customized contracts. Equine Legal Solutions also offers a wide range of horse contract forms, such as horse sale and purchase agreements, boarding contracts and equine liability releases. These equine contracts are available for download from Equine Legal Solutions’ website.

This column is provided for informational purposes only and is not intended to be legal advice. Because even small variations in the facts and circumstances of individual legal cases can dramatically affect the advice an attorney would provide, Rachel Kosmal McCart, Equine Legal Solutions and highly recommend that all readers with potential legal cases consult their own attorneys. If you don’t have an attorney, Equine Legal Solutions’ website offers a state-by-state directory of equine attorneys, along with tips for hiring an attorney.

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