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First right of refusal

This is a discussion on First right of refusal within the Horse Law forums, part of the Horse Resources category
  • Wiki first right of refusal
  • Horse buying first right of refusal enforceable?

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    11-12-2011, 01:33 PM
  #31
Trained
I see nothing wrong with having the first right of refusal in a contract. The buyer does not have to agree.

However, this from Wiki:

"Because an ROFR is a contract right, the holder's remedies for breach are typically limited to recovery of damages. In other words, if the owner sells the asset to a third party without offering the holder the opportunity to purchase it first, the holder can then sue the owner for damages but may have a difficult time obtaining a court order to stop or reverse the sale. However, in some cases the option becomes a property right that may be used to invalidate an improper sale."

Right of first refusal - Wikipedia, the free encyclopedia

It is not stupid or immoral to put it into a contract. However, enforcing it will be a challenge. A very old lawyer once told me that, particularly in small claims, "The law is whatever the judge says it is that day in court." There is a lot of truth in that.

Also, unless the horse is very expensive, you would go to small claims and sue for damages, not for the horse. In Arizona, the state bar association has a deal where you call them, and they refer a lawyer who specializes in your area of concern. You pay the bar $35, and the price includes 30 minutes consult with the lawyer they refer. It is a GREAT deal for anyone with a legal question, since you get actual legal advice for $35.

If you hire the lawyer to write a letter, you will probably spend more than you could collect in damages for most horses. I did it for a $15,000 stock in my Mom's estate, and it cost me $700 for the lawyer to write several letters to an out-of-state outfit explaining AZ law and the consequences of ignoring it. For $15,000, it was worth it. But for the value of a disputed horse?
     
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    11-12-2011, 01:40 PM
  #32
Started
Quote:
Originally Posted by bsms    
I see nothing wrong with having the first right of refusal in a contract. The buyer does not have to agree.

However, this from Wiki:
Contact a good judge much better info than wiki. You can not sell something and retains rights to it and that includes first right of refusable. I have talked at length with this with my good friend Jack Wildes, lawyer/judge and now deceased. You can put it in a contract but if the other person doesn't care to honor it there is nothing you can do. At least that is the info from an attorney.
     
    11-12-2011, 02:16 PM
  #33
Showing
I would never agree to a contract with a first right of a refusal clause. There's just too many variables. The last thing I would want is for buyer to turn into a psychopath, neglect her horses, and have to sell the horse back to her . I just couldn't do it.

One email is enough for each reply. She tells you to get the h*ll out of her life, you send an apology note asking what you could have done wrong. If no reply, that is IT. Don't harrass her with apology emails. You got the point through the first time.

I'm sorry you missed out on buying this pony, but she is in no way obligated to sell him to you now. She offered him to you, you refused, and she fulfilled her contract.

ETA: Most rescues have a FROR clause; how does that work if the seller has no legal rights to the horse after the sale?
     
    11-12-2011, 04:14 PM
  #34
Foal
That's a interesting point that bsms brings to this thread. For example; To adopt from xxx rescue it's $250.00. The adopter signs a contract to take care of the horse and is not permitted to sell it in a 12 month period. If the adopter breaks a condition for not properly taking care of the horse or sells the horse within 12 months, the adopter can be fined for X amount of money or imprisonment no more than 1 year. Can this stand up in a court of law? There must be a difference between adopting and buying a horse!
     
    11-12-2011, 04:27 PM
  #35
Trained
I would NEVER adopt a horse or sign a contract to offer the horse back to the previous owners. I don't want to enter into a year long relationship with someone over a horse.
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    11-12-2011, 04:37 PM
  #36
Yearling
There is no harm in including a FROR condition if the buyer is willing to sign. If nothing else, you sold a horse you really care about to someone who could very possibly give you that right when they are ready to sell, instead of someone who would most likely not inform you at all when the horse again changed hands.

Who cares if this is was the OP chose to do. Even if it wouldn't hold up in court, it is still a good idea for someone who wants to keep track of the horse they are selling, given the buyer is an honest person.
     
    11-12-2011, 05:32 PM
  #37
Trained
If you want to keep track of the horse then don't sell it. If you sell it then let go of it and move on.
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    11-12-2011, 06:34 PM
  #38
Trained
I sold a mare last December with right of buy back. Our contract - handwritten & not reviewed by a lawyer, gave them the right to return Lilly for 60 days, no questions asked and I would buy her back for the sale price - a whopping $600. In theory, for as long as she lives, if they want to sell her, they are supposed to contact me (we live less than 2 miles apart) and offer to sell her back to me.

I consider this as no different than many rescues include in their contract.

Is it legally enforceable? Well, for a $600 horse, I doubt any money I could get in 'damages' would be worth filing in small claims court. It really was more of a statement of intent - a written agreement, clearly spelled out, saying this is what I want and that they agree to do so.

I see no harm in it. Sometimes horses don't work out at a new place. Lilly's only problem with me is that she and Trooper hated each other, and I was tired of keeping them separate. But she was moving into a corral with 2 other horses, and the new buyers had 60 days to decide if it was working. If not, I'd take her back. If she came up with some unknown to me disease, I'd take her back. Heck, my wife still refuses to drive past their place, because she cries when she sees Lilly with them - and Lilly is doing great there.

If they didn't want to agree to the contract, they didn't have to sign it or take her. My intent was simply that if, for example, they were killed in a car wreck and their kids wanted to sell the horses fast, I could keep Lilly from going to some dump of a place. And for them, they knew of our reputation (we use the same trainer and farrier), and it gave them confidence that if things didn't work out, they wouldn't be stuck with a horse that couldn't get along.

But for a $600 horse, it is not realistically a legally enforceable contract. If she was a $6 million horse, I'd bet a contract could be drawn up that WOULD be legally enforceable.
     
    11-12-2011, 08:38 PM
  #39
Started
I agree bsms it is always nice if if someone contacts you and offers the horse back. BUT according to more than one attorney friend they have no right too expect it to be valid. IF money exchanged hands it is not enforceable. Since I refuse to buy a horse from a rescue I don't know what the difference in the contracts would be but I doubt they would be enforceable either. A local rescue near me quit adopting out their rescues do to the fact that after they rescued a couple and adopted them out, they ended up going to slaughter two years later. You can now sponsor one of the horses but no adoptions going on.
     
    11-12-2011, 08:43 PM
  #40
Banned
Every animal I have ever owned with the exception of horses, has been from a rescue or shelter - the reason I don't have rescue horses is because of the conditions that they place on you. You cannot resell a horse, and have to give it back to them. Right..... so I take a horse needing training, put my time, my money into doing that make the horse worth 500% what I paid, and I cannot sell that horse on - oh no, that's not for me.
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