Why Do You Need a Bill of Sale to Sell or Buy a Horse? What Elements Does It Include?

One of the most important elements of buying or selling a horse is a horse bill of sale, also known as an equine bill of sale.

This comprehensive guide will tell you why you need one. We will also discuss the elements of a bill of sale and other important considerations.

Need for a Horse Bill of Sale

A horse bill of sale is an essential legal document that shows proof of transfer of the ownership of a horse or pony from the seller to the buyer. This way, the buying and selling parties record and document all the details of the transaction. This protects both parties from potential fraud.

A horse bill of sale is a legal requirement in certain states, such as California, Kentucky, and Florida (when the transaction value is more than $10,000). But even in states where it is not mandatory, it still makes sense to draft a horse bill of sale to protect the rights and claims of the buyer and seller.

If a buyer does not have a bill of sale and finds something wrong with the horse, it can leave them unprotected from the fraudulent transaction or the seller’s negligence. In this case, the buyer will have a tough time claiming damages from the seller.

A bill also enables a seller to officially hand over the ownership of the horse and prove that it is no longer in the seller’s possession.

While you may find many templates for bills of sale online, you must know for yourself all the essential elements it must include. These details will help you tailor the form to the specific details of your transaction.

Elements of a Bill of Sale

Note that these elements can be tweaked to accommodate the specific facts of your situation. This list is not all-inclusive as laws differ widely across states and require different terms and disclosures.

It’s best to seek legal guidance to comply with all local laws and regulations and ensure a smooth transaction.

Parties

The bill of sale must identify the buying and selling parties using their names and permanent addresses. Identification of the parties is critical if third-party agents are negotiating the deal.

Horse

The bill of sale should properly identify the horse being sold. It should cover details such as the color, age, breed, pedigree, name, gender, and registration or passport numbers.

Consideration Amount

The bill of sale must clearly state the consideration amount the buyer is paying for the horse. Besides the purchase price, the bill must also include instructions regarding the method of transferring the money from the buyer to the seller.

Representations

The bill of sale must state the representations made by the buyer and the seller in the course of the transaction. These representations and claims are integral to the transaction, and the promises made concerning the horse should be in writing.

The seller’s representations may include:

• Accepting that the bill of sale is a binding obligation
• Declaring that the sale does not flout any laws
• Affirming that the seller has received ownership of the horse
• Disclosing warranties regarding the horse’s health, fitness, and so on

The buyer’s representations include:

• Declaring that the purchase of the horse will not breach any laws
• Stating that the buyer has had a veterinarian do a pre-purchase examination of the horse—if the buyer so wishes. A pre-purchase examination is always recommended to protect the interests of the buyer.

Commissions

The bill of sale must mention if any commissions need to be paid to any third party. It should also state which party must make the payment of the commission.

Governing Law

If one of the parties is based in another state, the parties must decide and document which state’s law will govern the sale and thereby any disputes arising from it.

Risk of Loss

The parties must decide if the risk of loss or injury to the horse will pass from the seller to the buyer.

Signatures and Date

Both parties must sign and date the bill of sale. If a third party such as an agent or trainer is signing on behalf of the buyer or seller, that party must explicitly be authorized to do so.

Additional Considerations

As mentioned above, California, Florida, and Kentucky laws have specific requirements when it comes to the elements of a bill of sale. If a transaction is in excess of $10,000, the bill of sale must be in writing.

The buyer and seller should sign the bill, and the purchase price must be mentioned in writing. The commissions to third parties must also be disclosed. Both parties must have written consent if a third party will work as a dual agent (agent for both the buyer and seller) in the sale.