Legal focus
What’s the Problem With Verbal Contracts? Julie I. Fershtman, Attorney at Law www.equinelaw.net For decades, this author has written articles on the importance of getting equine-related agreements in writing. Some of the articles even shared common characteristics of effective contracts. Still, people in the horse industry continue doing business with nothing in writing, and disputes have occurred. This article explores what can potentially happen when verbal contract disputes become the subject of a legal battle.
Equine Industry Statutes That Can Make Contracts Important Aside from general state laws referenced in the cases described above, that can apply to a wide variety of industries, many states have laws unique to the equine industry. These laws sometimes make written contracts important,
Real Cases Where Verbal Contracts Failed
an agreement existed, however, and no
Over the years, verbal contract disputes have
alleged verbal agreement should not be
Equine Activity Liability Statutes
generated legal battles. Here are three exam-
enforced, the seller cited a different state
Currently, 48 states (all but California and
ples of cases where verbal agreements failed in
law [New York’s Uniform Commercial
Maryland) have some type of equine activity
court challenges because of state laws:
Code, Article 2-201], which required con-
liability
if not necessary. For example:
written contract existed. Arguing that the
statute.
Some
require
written
tracts for the sale of goods priced at $500
contracts. Arizona’s law, for example, provides
• In a 2003 case from Maine, a verbal agree-
or more to be in writing. Based on the law,
no protection unless the equine activity
ment regarding ownership, care, training
and taking into account circumstances of
participant has signed a “written waiver” that
and racing of thoroughbred racehorses
the dispute, the court ruled that no en-
includes specific language supplied in the
was found to be void and unenforceable
forceable agreement existed.
law. Similarly, West Virginia’s law requires
based on a state law [Maine Statute of
participants to sign a written statement using
Frauds, 33 M.R.S.A Sec. 51(5)] that re-
language that the law provides. Under the laws
quired certain types of contracts to be in
in a small number of states, “equine activity
writing. The verbal arrangement in that
professionals” or “equine activity sponsors”
case, the court found, violated the law.
will lose any benefits in their equine activity liability statute unless their written contracts
• In a 2000 New York case, the court refused to enforce a verbal contract involving the boarding, breeding and care of mares
include the law’s “warning” language or other language as the law specifies.
and resulting foals. In doing so, the court
Equine Sale Disclosure Laws
relied on a state law [New York General
California, Florida, and Kentucky have equine
Obligations Law Section 5-701] that re-
seller disclosure laws, which can impact the
quired certain types of contracts to be in
language of certain equine sales contracts
writing to be enforceable.
in those states. Kentucky’s law requires, among other things, written bills of sale and
• In a 1972 New York case, the plaintiff
disclosure of agency relationships in sales
was a horse buyer who claimed to have a
transactions involving race horses. Florida
verbal agreement to buy the defendant’s
has an equine sales statute that requires, in
racehorse for $60,000. The seller denied
part, that sellers and agents in Florida horse
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Winter 2020/21 | Riding Instructor
