First Right of Refusal in Horse Sale Contracts

What happens if you buy a horse but the seller hasn’t honored a first-right-of-refusal contract with the previous owner?
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First Right of Refusal in Horse Sale Contracts
A first-right-of-refusal is an agreement that gives someone the right to purchase a horse at the exact same terms and conditions contained in an offer that the owner has received (and wants to accept) from another buyer. | Photo: Anne M. Eberhardt/The Horse
Q: I unknowingly purchased a gelding from someone who had agreed to a “first right of refusal” with the person from whom she’d purchased him. However, I’ve now been told that the seller (who I bought the horse from) did not honor the first right of refusal with the previous owner (who she purchased the horse from). I’m concerned that someone else’s agreement, which I wasn’t aware of, could threaten my ownership of the horse. I paid for the horse and have a bill of sale. Do I own the horse, and does the previous owner have a right to him? —Anonymous, California

A: This is a great question and one that I get quite often. In any other field of law, I would say that I hate (!) first-right-of-refusal in contracts, because I prefer a nice clean break and because the terms are difficult to enforce. But, in the horse industry, I get it. I’d want one if I sold my best friend, too (in fact, when I’ve personally sold horses, I’ve included this stipulation).

So, what is a “first-right-of-refusal” in a contract?

A first-right-of-refusal is an agreement that gives someone the right to purchase a horse at the exact same terms and conditions contained in an offer that the owner has received (and wants to accept) from another buyer. This is most commonly seen where Party A sells a horse to Party B, then Party B gets an offer to from Party C to buy the horse. But first, Party A must have the opportunity to buy the horse for the same price and under the same contractual obligations as Party C has offered (even if it’s years later!)

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Written by:

Jennifer A. McCabe, JD, is an attorney admitted to practice in all California state courts. Involved in the horse industry since childhood, McCabe earned her BA with a minor in equine science from California Polytechnic State University, San Luis Obispo. She received her law degree from the University of the Pacific, McGeorge School of Law, where she also earned a certification in advocacy. She previously served as an administrative adjudication hearing officer for the Institute for Administrative Justice, where she was appointed by various government agencies to resolve disputes between those agencies and parties affected by agency decisions. Her past experience also includes several years in intellectual property law, employment law, and personal injury litigation. You can learn more about McCabe and her equine law practice at California Horse Lawyer.””ennifer A. McCabe

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