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Three Written Words That Might Prevent a Lawsuit

Gene buys a mare from a horse seller across the country, and pays the full purchase price, which the seller receives. Shipping was set for the next day. As the shipper pulls in to get the horse, it is discovered that the horse has become seriously ill and dies within hours, while still at the seller’s stable. Is Gene entitled to a refund?

The answer could depend on three important words, “Risk of loss.”

Who Bears The Risk of Loss?

“Risk of loss” is a phrase associated with the sale of personal property, including horse sales, and it refers to the risk that the item sold could be lost, damaged, or destroyed before the buyer has taken possession and control of it. With horses, risks of loss, damage, or destruction are always present. For example, the day after Gene sends his final payment and signs the contract, the horse could become lame merely by playing in its pasture. Generally:

  • The risk of loss is whatever the parties have mutually agreed in writing (assuming they have a valid and complete sale contract); or
  • If no agreement exists between that parties that sets the risk of loss, the risk of loss might be set by law, possibly by the applicable state’s Uniform Commercial Code, if any.
  • If no written agreement exists, it is also possible that the circumstances of the sale can help address the issue. For example if Gene bought a policy of equine mortality insurance on the horse, effective the day he paid for it, and if Gene collected insurance proceeds because of the horse’s demise, it make no sense, legally and factually, for Gene to also recoup his purchase price from the seller.

In the example above, if Gene had a contract with the seller that had him accepting the risk of loss from the moment that he sent his payment, his entitlement to a refund is questionable.

Contracts Can Address

Legal battles often can be avoided if the parties plan ahead on the “risk of loss.” A written contract can specify which party — the buyer or the seller — has agreed to bear the risk of loss and when. Here is one example of contract language setting the risk of loss:

Buyer shall assume all risk of loss of the horse or diminution of the horse’s value as of the date a check or payment to Seller for the full purchase price clears the bank. From that date forth, and at all times thereafter, Buyer shall assume responsibility for all arrangements and expenses involving the horse.

A written contract can also require the buyer to purchase an equine mortality insurance policy on the horse for the full purchase price, effective the moment full payment is made.

These risk of loss issues present yet another reason why carefully written contracts are so vitally important in preventing disputes in equine transactions.

This article does not constitute legal advice. When questions arise based on specific situations, direct them to a knowledgeable attorney.

Categories: Sales/Disputes

Photo of Julie I. Fershtman

is considered to be one of the nation's leading attorneys in the field of equine law. A frequent author and speaker on legal issues, she has written over 400 published articles, three books, and has lectured at seminars, conventions, and conferences in 29 states on issues involving law, liability, risk management, and insurance. For more information, please also visit and, and

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Julie Fershtman, author of our popular and prolific Equine Law Blog, was interviewed by the State Bar of Michigan. The interview, which called Fershtman "Lawyer-Blogger," discussed our Equine Law Blog. We truly believe that this blog is the nation's most active blog serving the equine industry on equine law topics, and we thank you for visiting it. Read more here.

Julie Fershtman’s Recent and Upcoming Equine Law Speaking Engagements Include:

National Conference on Equine Law in Louisville, Kentucky on April 29, 2020. Topic will be on Waivers/Releases of Liability Involving Minor Participants. 

U.S. Hunter Jumper Association (USHJA) Annual Convention in Denver, Colorado on December 10, 2019. Topic will be on Equine Liability. 

IRMI Emmett J. Vaughan Agribusiness Conference (“AgriCon”) in Sacramento, CA (April 2019), and Richmond, VA (June 2019) and in Des Moines, IA (September 2019), on topics of “Equine Activity Liability Acts” and “Equine Mortality Insurance Disputes.”

National Conference on Equine Law in May 2019 in Lexington, KY, on the topic of “Equine Activity Liability Act Updates” and liabilities involving hosting of equine clinics. 

Agricultural Claims Conference in Kansas City, MO, in March 2019 on topics of “Loose Livestock Liabilities.”

2018 American Bar Association Annual Meeting in Chicago, IL, on “Equine Mortality Coverage and Disputes.”

November 2018, American Horse Council webinar on “Equine Liability.”

Honors & Recognitions

Equine lawyer, Julie Fershtman, has received these prestigious equine industry awards from respected equine organizations:

"Excellence in the Advancement of Animal Law Award" - American Bar Association Tort Trial & Insurance Law Section Animal Law Committee

"Distinguished Service Award" - American Youth Horse Council

"Industry Service Award" - Michigan Equine Partnership

"Catalyst Award"- Michigan Horse Council

"Outstanding Achievement Award" - American Riding Instructors Association 

"Partner in Safety Award" - American Riding Instructors Association 

"Associate Service Award" - United Professional Horseman's Association

"National Partnership in Safety" Award" - Certified Horsemanship Association 

What our Equine Law Services can Provide

Handling breach of contract, fraud/ misrepresentation, commercial code, and other claims involving equine-related transactions including purchases/sales, leases, mare leases/foal transfers, and partnerships.

Litigating disputes in court or through alternative dispute resolution (arbitration, mediation, facilitation).

Defending equine/farm/equestrian industry professionals,  businesses, and associations in personal injury claims and lawsuits.

Drafting and negotiating contracts for boarding, training, sales, waivers/releases, leases, and numerous other equine-related transactions.

Representing and advising insurers on  coverage and policy language as well as litigation;

Advising equine industry clubs and associations regarding management, rules, bylaws, disputes, and regulations.

Representing some of the equine industry's top trainers, competitors, stables, and associations.

Counseling industry professionals, stable managers, and individual horse owners. 


Did you know Julie Fershtman has spoken at the American Horse Council Annual Meeting, Equine Affaire, Midwest Horse Fair, Equitana USA, US Dressage Federation Annual Meeting, North American Riding for the Handicapped (now PATH International) Annual Meeting, American Morgan Horse Association Annual Meeting, American Paint Horse Association Annual Meeting, US Pony Clubs, Inc.'s Annual Meeting, All-American Quarter Horse Congress, American Youth Horse Council Annual Meeting, American Riding Instructors Association Annual Meeting, CHA Annual Meeting, and numerous others? Consider signing her up for your convention. Contact Julie.

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