Equestrian buyers and sellers have been warned to be aware of entering into “unintended” contracts via online messages following a recent High Court ruling.
In the case of Jaevee Homes Ltd v Fincham, the parties discussed a construction project via WhatsApp, but never signed a written contract. After a payment dispute arose later, a judge ruled that a binding contract had been formed based on these communications because essential elements of a contract were included such as an offer, acceptance and terms.
Equine lawyer Hannah Bradley, partner at Aria Grace Law CIC, told H&H that although this was not an equine case, it sets a precedent and provides “important guidance for those who negotiate sales via messaging platforms”.
“This applies for social media messaging like Facebook, WhatsApp or text; where despite the informality, you can form a legally binding contract,” she said, adding that it is common in the horse world for buyers and sellers to use these platforms to exchange photos, negotiate prices or arrange viewings and vettings.
“Aside from the risk of creating a binding contract when you don’t intend to, the further problem is, you are not necessarily confined to what you think you have agreed. There are many terms that might be implied by statutory or common law and they can all become part of the contract, which is a bit of an uncontrolled beast. You can also fail to include terms which you might have wanted to. Whereas if you have a formal written contract you can generally consider and regulate what the terms are in a bit more detail.”
Ms Bradley said a lot of legal cases arise in the equestrian world based on contracts formed via electronic communication.
“It’s obviously a time when people are excited about a new horse and want to do things quickly, and often they’re not thinking about the potential adverse consequences,” she said.
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“It’s about being aware and exercising caution when you’re entering into these communications, whether you’re the buyer or seller.”
To reduce the risk of creating “unintended contracts”, Ms Bradley advises to use language to clarify that discussions are preliminary and non-binding, such as “subject to signed contract” and “pending formal agreement”. She also recommends considering independent legal advice for complex or high-value sales.
“While messaging apps provide speed and convenience, they also demand care. Every message could be relied on at a later date whether it be to prove a contract, or in respect of a dispute post sale,” she said.
“Once preliminary negotiations are complete, send a formal written contract via email or signed on paper in person. That contract should set out all the key terms, and contain warranties that are important to either party. By using cautious language and moving to formal agreements when appropriate, you can protect yourself from accidental commitments.”
British Horse Society director of horse care and welfare Gemma Stanford told H&H it is “incredibly important” to draw up a formula agreement when buying a horse.
“While fast communication tools such as text conversations are convenient, they’re no substitute for well drafted contracts. It’s the only way for everyone to be completely explicit on what has been agreed,” she said.
“We advise you to clearly state the terms and conditions the horse was purchased under, including arrangements regarding a deposit and the circumstances in which this deposit should be returned. Make sure both parties sign the document, to avoid any disputes. We know that it can be a daunting process, but there are many tools to support people with drafting a contract.”
Ms Stanford added that the BHS offers a sales agreement service to its members to assist with pulling together a “fool-proof” sales contract.
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Since joining H&H in 2018, Becky has covered a broad range of equestrian news including welfare matters, veterinary studies, FEI Tribunal hearings and road safety campaigns. She has also interviewed top riders including Scott Brash, John Whitaker and Ian Stark, to name just a few. Becky’s reporting has taken her to Canada for Spruce Meadows and France for Pau five-star, as well as the Royal Highland and Blair Castle International Horse Trials closer to home. She was also a key part of the remote reporting team for the Tokyo Olympics and the Europeans.
