The Legal Aspects of Cross Border Purchase of Sport Horse

Equestrian sports are widely popular across the globe, be it polo, endurance, classical dressage, show jumping, horse racing and many more. Experts reckon that horses and equestrian sports are meant for one who has the true passion for and knowledge of it prior to considering investing in it.

As an expensive investment to engage in along with greater risks on return associated therewith, it leaves us with no surprise that this high-adrenaline sport appeals to the high net worth individuals.

However, in cases of sale and purchase of sports horse, things may not be as simple as they may appear to be– especially when such sale and purchase of sports horse is a cross-border transaction involving two different jurisdictions of one that of the seller and the other being that of the buyer.

A broader look into the key legal aspects involved in this context could be seen as follows:

Key Legislations

Traditionally and as is quite prevalent in many jurisdiction still today, trade of Horses are generally regulated under the Contract Act, the Sale of Goods Act and the Consumer Rights/Protection Act of the concerned jurisdiction(s) forming the subject matter of the transaction.

The usual practice in a cross-border sale and purchase of a horse is that the law of the land of the seller is made applicable to the transaction on the insistence of the seller and thus governing it.

Identification of Horse

Towards purchasing a sport horse, the buyer should at first ensure that the sport horse matches the buyer’s requirements as regards to its age, color, breed, gender, name, pedigree etc. This information can be obtained from the registration documentor passport of the sport’s horse.

A passport for a sport horse is necessary in the case of cross-border purchase as it is more likely that the sport horse will be transported to the buyer’s home jurisdiction.

Caveat Emptor

Once the buyer is satisfied with the identification details of the sport horse, the dominant principal to remember is caveat emptor – let the buyer beware! As stated in an old case, Jones v. Bright, (1926) 130 E.R. 1167, “If a man sells a horse, generally he warrants no more than that it is a horse.” It is up to the buyer to become informed about the horse that he wishes to purchase.

Ideally, the buyer should also consider verifying the soundness and fitness of the sport horse. This is generally achieved through pre-purchase veterinary examination of the sport horse carried out at the buyer’s expense.

1. Pre-Purchase Veterinary Examination

The objective of the pre-purchase veterinary examination is to reduce the buyer’s risks in relationship to the general health and athletic soundness of the sport horse that the buyer wishes to purchase.

The examination is not meant to guarantee soundness of the sports horse but is an attempt, on the part of the examining veterinarian, to ascertain any pre-existing problem or any potential problem that may affect future soundness of the sport horse. Once the buyer is satisfied with the outcome of the pre-purchase veterinary examination, the buyer and the seller will enter into a contract for the sale of horse.

2. Contract for Sale

The contract for the sale of horse is the primary document that captures the terms and conditions based upon which the buyer and the seller conclude the sale and purchase of the Sport Horse.

Generally, the Contract would contain the following key clauses (amongst other):

Description of the Sport Horse: this will include the horse’s physical description, markings (if any), age, sex, breed, passport/registration details etc. (this is to put on record the identification the Sport Horse and acknowledgement of such identification by both the seller and the buyer in order to avoid any future dispute concerning the identity of the Sport Horse purchased/sold);

Purchase price & payment terms: this typically states the purchase price payable by the buyer to the seller towards the sale and purchase of the Sport Horse along with the agreed payment terms – recording whether the full or any portion of purchase price has to be paid at the time of the contract. There are instances where the full purchase price is given upon delivery of the horse or payment is agreed on instalment basis.

Delivery: this clause specifies the terms concerning the delivery of the Horse inclusive of the related risks, burden and cost associated with it.

In a cross border sale and purchase of a Sport Horse, the responsibility of the transportation of the Horse is cast on the buyer. Once the Seller hands over the Horse to the buyer, all risks, costs and burden associated with transportation/delivery of the Horse (including co-incidental deterioration or death of the Horse) will shift to the buyer.

Representations: Both the buyer and the seller make respective representations in relation to the transaction. The seller’s representations include amongst other of its unfettered ownership/title over the Sport Horse, that (a) the Horse does not suffer from any health issues to the knowledge of the seller, (b) the passport of the Horse is valid and (c)the information contained therein are accurate etc.

Representations from the buyer’s perspective are much lesser and would generally include representations concerning the purchase price to be paid to the seller.

The above are some of the clauses that are found in a typical Contract for Sale of Horse. Depending on the transaction and agreement amongst the parties, a comprehensive Contract for Sale of Horse may also include clauses on: (i) insurance (ii) risk of loss (iii) liabilities and indemnities (iv) termination (v) post termination consequences and obligations etc.

Upon the conclusion of the Contract for Sale and the consequent hand over of the Horse to the buyer having taken place, the buyer thereafter makes arrangements for the import of the Horse.

Importation of the Sports Horse

The buyer may either consider temporary importation or permanent importation of the Sport Horse based on its requirements. As the case may be, the buyer has to comply with the import regulations of the country into which the Sport Horse is intended to be temporarily or permanently imported.

Broadly, importation of Sport Horse into Malaysia would require the consignment of the Sport Horse to be accompanied by, amongst other:

• a valid import permit issued by Malaysian Quarantine and Inspection Services (MAQIS);
• a certificate containing a full description or identification of the animals; and
• a veterinary health certificate issued within 7 days of export.

Besides the above, the Malaysian regulations on importation of horses also stipulate that:

• the consignment of Sport Horse shall be transported in clean, disinfected and sealed floats or carried by ship or aircraft direct to the entry point or prescribed landing place or any other port or airport as in Malaysia; and
• the imported horse shall have to undergo quarantine for a period of not less than 14 clear days in the Quarantine Station upon arrival in Malaysia.

Enforcement of Contract

The Contract for Sale is binding on both the seller and the buyer. Naturally, in the event the seller or the buyer is in breach of the terms of the contract, the terms of the contract can be enforced against the breaching party.

Enforcement of the contract will be undertaken through the court of competent jurisdiction, unless the parties have agreed to an alternative dispute resolution in the form of Arbitration under the contract.

Generally, there are three types of relief in which a party to such contract can request for, namely, specific performance of the contract, rescission of the Contract and related damages.

Conclusion

Broadly, the above captures the legalities involved in the sale and purchase of a sport horse. There are however other legal aspects involved in relation to registration and participation of a sport horse in equestrian competitions. For instance, in order to participate in international equestrian competition such as SEA Games, there are international regulations to be complied with inclusive of the Federation Equestrian International (FEI) rules, host country’s sport related legislations, host country’s local equestrian association rules, SEA Games Federation charter and rules, rules under the technical handbooks issued by local Olympic Committee etc.

Indeed a sport horse is purchased to participate in equestrian competitions. Hence, besides considering the legalities involved in the sale and purchase of sport horse, one must necessarily consider the compliances under the relevant equestrian competition related rules and regulations as mentioned above.

Written by:

Syed Zomael Syed Hussain (general@azmilaw.com)