Horse sellers, horse rescues, and those who give away horses are at risk of encountering this same problem. What is it?  The seller (or one who parted with the horse) expected a ‘right of first refusal’ on the horse that would allow him the chance to own the horse in the future. Instead, the buyer violated the agreement by wrongly giving away or selling the horse to someone else without first offering the former owner the chance to re-purchase the horse.
 
This article discusses the right of first refusal clause within equine sales contracts.
 
What is a Right of First Refusal?
A ‘right of first refusal’ is a right that is granted under a contract that requires that the one who has bought or received the horse, under certain terms and conditions, give the seller an opportunity to own the horse again if or when the buyer wants to part with the horse.
 
 Here is one example of how a right of first refusal clause can be worded:
 
Seller retains right of first refusal if, at any time in the life of the horse, the Buyer is unable or unwilling to keep the Horse.  If Buyer desires to sell the Horse, Buyer agrees to contact Seller and allow Seller the first opportunity to purchase the Horse.  Seller also retains right of first refusal to take the Horse back should Buyer wish to place the Horse in a new home, but does not wish any money back.  
 
The example above is by no means appropriate for all situations.  In fact, right of first refusal clauses can be much more complex and detailed.  For example:
 
* Some contracts impose time limits on how long the right of first refusal can be offered to the former seller.  
 
* Some contracts more clearly specify how much must be paid to re-purchase the horse and when payment must be made.
 
* Some clauses provide that if the horse owner receives a good faith offer to buy the horse, and if the horse owner is inclined to accept that offer, the owner must first allow the former owner a chance to match or beat that offer within a limited period of time.  If so, the former owner can re-purchase the horse.
 
What if the Agreement is Not Honored?
What happens if a horse was sold subject to a contract with a right of first refusal, but the horse buyer failed years later to honor it and, instead, sold the horse without giving the former owner an opportunity to buy it back?  Surprisingly, the law generally allows few options.
 
As one option, the holder of the right of first refusal can sue for damages (money).  The claim would be based on the argument that the person who was wrongly deprived of the horse and, as a result, he or she has lost a sum of money.  Proving a claim of this type could be very difficult.
 
Another option, if the problem is caught before the horse is sold to someone else, would allow the holder of the right to bring a lawsuit to halt that sale from taking place.  This would be a lawsuit seeking an injunction and/or temporary restraining order so that the one with a right of first refusal can exercise his or her rights.  This author has written about injunctions in past.
 
Avoiding Disputes
Right of first refusal clauses require careful drafting and attention by parties to the transaction.  For your protection, consult with a lawyer.
 
This article does not constitute legal advice.  When questions arise based on specific situations, direct them to a knowledgeable attorney.
  
About the Author
Julie Fershtman, a lawyer for nearly 21 years, is one of the most active and experienced Equine Law practitioners in the United States.  She has achieved numerous courtroom victories for her clients around the country and has drafted hundreds of equine industry contracts.  A speaker in 23 states, her upcoming speaking engagements include the American Riding Instructors Association Annual Convention in Naples, Florida, on December 3, 2007.  Contact her at 248/851-4111, ext. 160, or visit www.equinelaw.net and www.equinelaw.info.  
 
Julie Fershtman’s books can help you avoid disputes and understand your rights.  The books, MORE Equine Law & Horse Sense and Equine Law & Horse Sense, are easy to read and can be ordered separately or together.  Order both books for $42.90, first-class shipping included.  Call Horses & The Law Publishing at 866/5-EQUINE.  Or, send check or money order to Horses & The Law Publishing, P.O. Box 250696 Franklin, MI 48025-0696.