Express Warranties

Mary listed her 9-year-old warmblood, Hank, for sale on several online horse marketing sites. In her sale advertisements, Mary described Hank as being well trained, able to take a joke, a push ride, clever, sound, and worth the money. After a few tire-kickers, Susan came to test ride Hank and fell in love.

Mary and Susan negotiated the purchase price, they each signed a bill of sale, and the following day Susan transported Hank to her farm. A month after the purchase, Susan had Hank examined by a veterinarian because Hank had been acting as though he was having vision problems.

The veterinarian’s examination revealed that Hank had periodic ophthalmia, an incurable condition which will result in total blindness. A condition which, according to the veterinarian, was in existence prior to the sale. Furious, Susan called Mary and demanded a refund of the purchase price and for Mary to take back Hank. Mary said that she had no idea Hank had this condition and refused to refund the purchase price.

Susan sued Mary for, among other causes of action, breach of express warranty. In most states, in the context of equine sales, an express warranty is an affirmation of fact, a promise, or a description of the horse that becomes the basis of the purchase. Oftentimes, if an express warranty is created, even inadvertently, the horse must conform to the warranty.

In this case, the court found that Mary created a soundness warranty for Hank when she stated in her sale advertisement that Hank was sound, and that the soundness warranty was breached because Hank’s condition was present at the time of the sale and will progress to a point which will make Hank no longer useful to Susan. The court went on to say that Susan was not obligated to inspect Hank (or have a veterinarian inspect Hank) prior to the purchase, but that Susan could rely on Mary’s affirmations as to the condition of the horse.

An important distinction to note which is illustrated by this case is the meaning of the term “sound”. It is likely that when Mary said Hank was “sound” she meant soundness in the veterinary context. As in, Hank is not lame. Soundness, however, in this context meant that Hank lacks a disease or condition which makes him less capable for the work contemplated in the agreement or that he lacks a disease or condition which in the ordinary progress of the disease or condition makes him less useful.

Also noteworthy, is that it is not necessary to the creation of an express warranty for the seller to use formal words such as, “warranty” or “guarantee” or that they even have the specific intention to make a warranty. Therefore, sellers should take care when making verbal and written statements to a buyer or when drafting sale advertisements as they can oftentimes, inadvertently, create express warranties. Sellers should also ensure that they are utilizing properly drafted sale agreements so to effectively exclude any such inadvertently created warranty, if allowed in their state.