Right to Return a Horse under the Consumer Law
Under the new Australian Consumer Law (operative from 1 January 2011), buyers of horses from business like studs, professional riders and riders and horse dealers (but not auctions) enjoy statutory guarantees. One is that the horse will be of an ‘acceptable quality’ and another is that the horse will be ‘fit for purpose’ made known to the seller or any purpose promoted by the seller.
The Consumer Law says that in some situations there is a right to reject the horse for breach of a guarantee.
The right to reject a horse exists if there is serious failure (called a ‘major failure’ in the Consumer Law) to comply with the guarantee. One such case is if the horse is not of an acceptable quality because it is unsafe. Another is where the horse is substantially unfit for purpose and the problem cannot be easily and quickly fixed. Another case (which is more likely to arise than the others) is where the notional ‘reasonable buyer’ fully acquainted with the problem and the circumstances of the sale would not have purchased the horse.
If the right exits, the buyer must inform the seller in writing of the rejection and the reason for it.
Under the Consumer law, the buyer can, in addition to rejecting the horse, claim compensation for the loss, such as the cost of returning the horse.
It is important to note, however, that the buyer can lose the right to reject the hose in some situations, leaving the buyer to pursue compensation for the difference between the price paid and the real value of the horse.
If the horse were injured, for instance, after the buyer took possession, the buyer would not have a right to reject the horse.
The Consumer Law also says that the right will expire at some point in time, depending on individual circumstances. The Consumer Law calls it the ‘rejection period’. In simple terms, this is the period in which it would be reasonable to expect that non-compliance would become known. The length of this period will vary case by case. The use for the horse and the nature and intensity of its initial work will be relevant factors. For Example, the horse might be hacked for 3 weeks to settle in before some light work reveals a problem. Another instance where a lengthy period might arise is where the buyer is ill or on a long holiday, so the horse is not even ridden after delivery.
In the absence of good reason why the problem took as long as it did to become apparent, the seller is likely to argue that the rejection period is over; in other words, given the purpose for the horse, the length of time in the buyer’s possession and the nature and intensity of the use of the horse in that time, it is reasonable to expect that the non-compliance would have become apparent sooner. If the seller is correct, the buyer is left only with a right to claim compensation.
If the horse is properly rejected, the buyer must return the horse unless it will incur significant cost. If that’s the case, the seller must collect the horse within a reasonable time at his or her expense. The buyer has the right at that point to either seek a refund or ask for a replacement horse of the same type and value if such a horse is available to the seller. Ownership of the horse also re-vests in the seller on notification of the rejection.
It is sensible and wise from a legal point of view for buyers not to delay using the horses in its new environment and at a reasonable level of intensity to identify any issues and to inform the seller promptly in writing if any are observed. Delay can prejudice the buyer’s rights.
Published Horses Deals Magazine, June 2012
© 2012 Michael Mackinnon. Reproduced with permission