Buying a horse in Germany is often a significant and rewarding investment, whether for professional equestrian sports, breeding, or leisure. However, it has its challenges. Horses are not just commodities; they are living beings, and their purchase involves unique legal and financial complexities that can take buyers off guard.
Buying a horse in Germany involves dealing with specific contractual obligations, ensuring veterinary checks are properly conducted, and addressing tax implications—especially for international buyers. Contractual difficulties include drafting the purchase contract, determining warranty aspects, and determining regulations regarding the import and export of horses. Beyond the technicalities, disputes over health defects or performance issues can arise, turning what should be a joyful milestone into a stressful situation.
At Schlun & Elseven Rechtsanwälte, our German equine lawyers understand buyers’ challenges and the value of getting everything right the first time when buying a horse in Germany. Our approach combines a clear understanding of German equine law with practical solutions tailored to your needs, ensuring your transaction is secure and transparent. With our guidance, we help you focus on the joy of owning your new horse while we handle the legal complexities.
Written Contract of Sale when Buying a Horse in Germany
While it is legally possible to finalise the purchase of a horse with a handshake, such informal agreements can lead to complications in the event of a dispute. A written contract of sale provides clarity and serves as critical evidence should disagreements arise. At Schlun & Elseven Rechtsanwälte, our German equine lawyers can assist you in drafting or reviewing purchase agreements tailored to your needs.
A well-drafted purchase contract should include essential details about the horse, such as its name, sex, life number, pedigree, and markings. Additionally, the agreement should clearly describe the horse’s condition, the intended purpose for its purchase, and its suitability. This level of detail can help prevent future misunderstandings and disputes.
We advise caution when relying on generic sample contracts found online, as they may not address your situation’s specific legal requirements or nuances. Our German equine lawyers will ensure that your contract includes all necessary provisions, including the validity of general terms and conditions and the enforceability of warranty restrictions or exclusions.
It’s essential to remember that the ability to limit liability depends on the nature of the transaction:
- In private sales, parties can agree to exclude liability entirely.
- Under German law, exclusions of warranty liability are generally invalid in consumer goods transactions (e.g., between a commercial seller and a private buyer).
Including a clause in the contract regarding transferring the horse’s documents can also contribute to a smooth purchase process. Crucial documents, such as the equine passport (horse passport) and title deed, should be handed over with the horse. A breeding certificate (pedigree and certificate of performance of a breeding horse) may also be essential for buyers interested in breeding.
By working with our team, you can ensure that your purchase agreement is legally sound and protects your interests when buying a horse in Germany.
Warranty for Defects when Buying a Horse in Germany
Under German law, the seller is obligated to provide the buyer with a horse free of defects (§§ 433 para. 1 sentence 2, 90a BGB). Legal disputes in connection with the purchase of a horse are very often related to the so-called agreed characteristics of the horse. It is, therefore, extremely important that this point is carefully worded in the purchase agreement.
The general limitation period for warranty claims is two years from the handover date. However, the terms vary depending on the nature of the sale:
- Private Sales: Mutual agreements can modify or exclude the limitation period.
- Consumer Goods Sales: The period for used horses can be shortened but must be at least one year.
The concept of “used” horses was addressed in a ruling by the German Federal Court of Justice (BGH) on 9 October 2019 (Case No. VII ZR 240/18). The court deemed a 2.5-year-old stallion “used” despite it not yet being utilised as a riding or dressage horse. Whether a horse is considered “used” depends on the case’s specific circumstances rather than a fixed age threshold.
What Constitutes a Defect when Buying a Horse?
A horse may be considered defective for several reasons:
- Health Issues: Physical or medical conditions that impair the horse’s performance or well-being.
- Discrepancies in Agreed Qualities: For instance, if the horse’s breed, size, or specific characteristics do not match the contractual agreement.
- Training or Suitability: If the horse does not meet the agreed level of training or is unsuitable for the intended purpose, such as being a show horse, dressage horse, breeding animal, or beginner’s horse.
- External and Internal Factors: The age of the horse (external), behaviour at the farrier, and behaviour when being loaded onto a trailer (internal) can also play a role here.
Where no specific agreement is made regarding the horse’s condition or purpose, the horse must meet the standards for regular use and possess the typical characteristics of horses of the same type, § 434 para. 3 BGB. Determining these standards can sometimes lead to disputes.
Burden of Proof in Transactions
The buyer generally bears the burden of proving that a defect existed at the time of the handover, § 446 BGB. However, in the case of consumer goods sales (e.g., a transaction between a commercial seller and a private buyer), the law presumes that defects discovered within the first six months after handover were present at the time of delivery, § 447 para 1 Sentence 2 BGB. The seller must disprove this presumption, effectively reversing the burden of proof.
Steps to Address a Defect when Buying a Horse
When a defect is discovered after buying a horse in Germany, it is crucial to address the issue promptly and follow the appropriate legal procedures. German law provides a structured framework for resolving such disputes, ensuring that both buyers and sellers have clear obligations and rights, § 437 BGB. Here are the key steps involved:
- Notify the Seller: The buyer must inform the seller of the defect and allow a reasonable period for the seller to remedy it.
- Seller’s Right to Subsequent Performance: The seller has the right to rectify the defect, either by “repairing” the horse (e.g., covering veterinary costs) or providing a replacement, if this is possible under the circumstances of the individual case.
- Escalation: If the seller refuses or fails to remedy the defect within a reasonable period, the buyer may pursue other remedies, such as:
- Price Reduction: Requesting a reduction in the purchase price.
- Contract Rescission: Cancelling the sales contract and returning the horse.
It is essential to note that these remedies are typically only available after the seller has been given an opportunity to perform subsequent corrective measures, § 323 BGB, unless the defect makes such performance unreasonable or impossible.
Addressing defects in horse purchases requires clear communication and a thorough understanding of the applicable legal provisions. By following these steps, buyers can protect their interests while maintaining a fair approach to resolving disputes. At Schlun & Elseven Rechtsanwälte, our German equine law specialists can guide you through this process, ensuring that your rights are upheld and helping you achieve the best possible outcome.
Veterinary Examination of the Horse (AKU) before Buying a Horse in Germany
A veterinary examination, known as Ankaufsuntersuchung (AKU), is a critical step in the horse-buying process. This examination helps assess the horse’s health and suitability for its intended use, providing valuable information for both buyers and sellers.
The AKU examination aims to:
- Evaluate the horse’s overall health.
- Assess its physical condition and suitability for the agreed purpose, such as competition, breeding, or leisure riding.
- Provide a documented basis for the agreed quality of the horse, which can be incorporated into the purchase contract.
It is essential to note that the AKU reflects the horse’s condition only at the time of the examination. If the examination was conducted earlier, the buyer should confirm when it occurred, as the horse’s condition may have changed in the interim.
Types and Costs of Veterinary Examinations
There are two main types of AKU:
- Basic Examination (Small AKU): A clinical assessment focusing on the horse’s general health and condition.
- Comprehensive Examination (Large AKU): Includes additional tests such as X-rays, ultrasound scans, or bloodwork. This is often recommended for higher-value horses, such as show or competition horses, where greater physical resilience is required.
The decision between a small or large AKU is often made dependent on factors such as the intended use of the horse and the purchase price. However, to avoid any unpleasant surprises, it is often advisable to have a larger AKU carried out. The costs of the AKU are typically borne according to an agreement between the buyer and seller. These costs can vary depending on the scope of the examination and the veterinarian’s fees.
Veterinarian’s Liability during the AKU Examination
A veterinarian performing the AKU has a duty to conduct the examination diligently. If the veterinarian makes a mistake or provides inaccurate findings, they may be held liable for damages under German law (§§ 634 No. 4, 280 para. 1 BGB). For instance, if the buyer commissions the examination and relies on incorrect results to purchase the horse, they may be entitled to claim compensation for any resulting financial loss, such as treatment costs. This was affirmed by the German Federal Court of Justice (BGH) in its ruling of 22 December 2011 (Ref. No. VII ZR 7/11).
International Purchase, Import and Export of Horses
Buying or selling a horse across borders involves unique legal, logistical, and regulatory challenges. Whether within the EU or internationally, careful planning and compliance with legal requirements are essential to ensure a smooth transaction and transport process.
Transport and Veterinary Requirements
Before transporting a horse internationally, a veterinary examination is necessary to confirm the animal’s fitness for travel. This is especially important for long-distance journeys, as it ensures the horse’s well-being and compliance with transport regulations.
The documentation required for transport depends on the destination:
- Within the EU: A valid health certificate and equine passport must accompany the horse during transport. It is usually necessary to make an appointment with an official veterinarian before transportation.
- Into the EU from a Third Country: Additional certifications, such as an import certificate, may be required. Specific conditions apply for race or competition horses, which often have stricter veterinary and documentation requirements. Compliance with the regulations of the exporting and importing countries is crucial.
- From the EU to a Third Country: Similar to imports, exports to third countries often require additional certifications. Quarantine regulations frequently need to be observed, depending on the destination country’s health requirements.
Our legal team can guide you through the required documentation and processes tailored to your specific situation.
Jurisdiction and Applicable Law
The parties can contractually agree upon jurisdiction in cross-border horse sales. This agreement ensures clarity about where potential disputes will be resolved. In the absence of such an agreement, jurisdiction is determined by international civil procedure law. For example, under the EU Brussels I Regulation (EuGVVO), a party may be sued either at their principal place of business or where the goods were delivered.
Additional protections apply to consumer transactions. Consumers have the right to sue in their home country if the seller conducts business or targets customers in that jurisdiction. The parties to a cross-border horse sale can also agree upon the governing law in the sales contract. This helps prevent conflicts and uncertainties about which legal framework applies.
Without an explicit agreement, the Rome I Regulation provides the default rules:
- For business-to-business contracts, the law of the seller’s habitual residence typically governs (Art. 4(1)(a) Rome I).
- For consumer contracts, the consumer’s habitual residence law applies if the seller conducts or targets business activities in that country (Art. 6(1) Rome I).
- Additionally, the UN Convention on Contracts for the International Sale of Goods (CISG) may apply to the transaction unless expressly excluded by the parties.
It is crucial for both buyers and sellers to carefully address these legal aspects in their agreements to avoid potential disputes and ensure a seamless transaction process. Consulting an equine lawyer with expertise in equine and international trade law can help safeguard the interests of both parties and provide clarity on applicable legal frameworks.
Tax Considerations when Buying a Horse in Germany
Tax implications play a significant role when buying a horse in Germany. In Germany, value-added tax (VAT) often applies to horse transactions, depending on the seller’s status. When purchasing from a commercial seller, VAT is generally charged at the standard rate, which must be factored into the overall cost of the horse. Private sales, on the other hand, are typically VAT-exempt, offering a potential cost advantage. For buyers within Germany, understanding the seller’s VAT status and ensuring proper documentation is essential for accurate tax reporting and compliance. At Schlun & Elseven Rechtsanwälte, our team is available to support you in this matter.
International buyers face additional layers of complexity when buying a horse in Germany. Transporting a horse across national borders can incur import duties, VAT, or other tax obligations in the buyer’s home country. For instance, horses imported from non-EU countries into the European Union may be subject to VAT and customs duties, depending on the horse’s classification, purpose (e.g., sport, breeding, or leisure), and declared value. Regulations can vary significantly between countries, making it crucial for buyers to consult German and local tax authorities before finalizing a purchase.
Buyers should also consider whether certain exemptions or reduced tax rates apply to their transactions. For example, special rules may exist for racehorses or competition horses, potentially reducing the overall tax burden. Additionally, careful tax planning is necessary when purchasing a horse, as VAT registration and recovery may affect the overall costs.
Properly addressing tax considerations can prevent unexpected expenses and compliance issues. At Schlun & Elseven Rechtsanwälte, our legal professionals can advise you regarding such tax-related problems and will ensure the conditions are met, particularly in international transactions. Our firm’s proactive approach reduces financial risks and increases compliance with German and international tax laws.
Types and Costs of Veterinary Examinations
There are two main types of AKU:
- Basic Examination (Small AKU): A clinical assessment focusing on the horse’s general health and condition.
- Comprehensive Examination (Large AKU): Includes additional tests such as X-rays, ultrasound scans, or bloodwork. This is often recommended for higher-value horses, such as show or competition horses, where greater physical resilience is required.
The decision between a small or large AKU is often made dependent on factors such as the intended use of the horse and the purchase price. However, to avoid any unpleasant surprises, it is often advisable to have a larger AKU carried out. The costs of the AKU are typically borne according to an agreement between the buyer and seller. These costs can vary depending on the scope of the examination and the veterinarian’s fees.
Veterinarian’s Liability during the AKU Examination
A veterinarian performing the AKU has a duty to conduct the examination diligently. If the veterinarian makes a mistake or provides inaccurate findings, they may be held liable for damages under German law (§§ 634 No. 4, 280 para. 1 BGB). For instance, if the buyer commissions the examination and relies on incorrect results to purchase the horse, they may be entitled to claim compensation for any resulting financial loss, such as treatment costs. This was affirmed by the German Federal Court of Justice (BGH) in its ruling of 22 December 2011 (Ref. No. VII ZR 7/11).
Practice Group: German Equine Law
Practice Group:
German Equine Law
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