Sold For A Bargain: The Horse Auction
By Denise E. Farris
The gavel falls. Your friends give you the high five for the great purchase you've just made. You load the horse, take it home, and the next day discover the horse is dead lame and mean as Hades. You realize you have just purchased an equine lemon, and you immediately want to know your legal rights against both the seller and the auction house that offered the horse for sale. What are your legal rights?
First, understand that all auctions operate on the traditional theory of "caveat emptor", or "Let the buyer beware". This makes sense, when you think about how an auction operates. The auction house operates as a conduit between any number of prospective sellers and buyers who pass through the auction house. In most instances, the auction house does not have long-term or prior relationship with either the buyer or the seller, no knowledge of the nature or quality of the goods being sold, nor of potential buyer's specific needs or desires in the product they bid on. Thus it is virtually impossible for an auction house to warrant goods in any fashion.
For this reason, a seller and buyer each sign paperwork from the auction house which expressly disclaims responsibility for warranty of any goods or merchandise sold through the auction, While the auctioneer may "publish" or advertise general information provided by the seller about the product, the auctioneer is relying on the truth of those representations by the seller and in most instances, disclaims any responsibility for the truthfulness where it is impossible for the auctioneer to make an independent verification of that truth. Both seller and buyer sign paperwork, either when placing an item in auction, or paying for an item purchased, which expressly states the buyer and seller's agreement that the auction house does not make warranties, and will not be held responsible for any warranty of any product sold. Both buyer and seller agree to thse terms in the paperwork they traditionally sign when either placing an item for sale, or in concluding the purchase of an item, including horses.
In summary, except in extraordinary circumstances, a buyer typically has no legal or contractual right to claim damages against an auction house or auctioneer related to an auction purchase and subsequent buyer remorse.
Likewise, the buyer's remedies against a seller are limited. Again, the buyer in most instances assumes the risk of purchase at auction, taking the horse in an "as is, where is" condition and subject to whatever faults or issues accompany the horse, disclosed or undisclosed. Limited exceptions may exist if the seller has published false information about the horse in a bill of sale, or false papers in a records depository affiliated with a sale. However, these circumstances rarely exist in typical auctions. In addition, the legal fee a disgruntled buyer may incur in proving fraud most often greatly exceed the buyer's damages, which are typically limited to the sales price the buyer paid for the animal. Legal fees are typically not recoverable as damages.
In summary, except in extraordinary circumstances, a buyer typically has no legal right to claim damages against a seller at auction where the buyer is assumed to buy the merchandise as is, with no warranties.
As with all sales transaction, a buyer's due diligence into the true value of the bargain is the buyer's most important tool. This is particularly true in the auction contest. Many people have made good purchases at auctions, but luck is never a substitute for due diligence and inquiry. A prospective buyer should read the auction bill of sales and gauge the quality of animals being offered prior to auction. On the day of the auction, the buyer should arrive early, examine the horse in detail prior to commencement of the sale, talk to the owner and any other knowledgeable people present about the horse's use, medical history, temperament and prospects, and where possible personally handle or ride the horse. Remember also, though, that any injury resulting from this "test ride" is assumed by the buyer under most state's equine activity liability acts, so a buyer should assume the horse is potentially dangerous before mounting up.
A buyer should also consider taking his or her own "expert" to the sale to assist in evaluating horses for sale. Often, a skilled trainer or veterinarian can immediately spot potential problem issues in a horse with minimal or limited observation, and can advise their client of potential risks before the sale commences.
In conclusion, most people attend auction looking for the "bargain purchase". Keep this in mind, and be a conscientious and careful buyer by following those guidelines set forth above. Understand that in most instances, the purchase becomes YOUR RISK once the gavel falls, and make you bid and pricing decisions accordingly.
