Q: Several big-name trainers have been in legal disputes over sales commissions in the past. How do I know if the person brokering my horse’s sale is taking me for a ride, and what can I do to protect myself?
A: It’s unfortunate that this is a relevant question to be asked. With that said, just because someone was sued over sales does not mean that there was anything improper done. Unfortunately, most people know part of the story, but the whole story sometimes has more pieces than what any one person knows.
With that said, the best way to protect yourself against any fraudulent sales or commission activity is to actually meet and talk to the buyer; as the seller, you and the buyer should have some form of communication. If you say, “Listen, I’d like to talk to the seller. I want to talk to the guy that’s sending the horse,” and there’s resistance to that—resistance to transparency between buyer and seller and resistance to communication—that would be a big red flag.
Next, you should ask for accounting for the funds. For instance, “Here’s the money that I’m going to be paying. I’d appreciate to know how it’s going to be broken down and what your commission is, just so I know what the other pieces are.” Again, resistance to this transparency is a big red flag.
Funny how we haven’t yet talked about contracts or bills of sale; a lot of the time common sense is all that it takes. It’s simply transparency in the discussion with the buyer and knowing how the funds are getting broken out to different parties.
However, if we are looking at and getting into written documentation, there are two things you may want to consider: the bill of sale and a agreement in writing between you and trainer brokering the sale.
The bill of sale should include details such as a description of the horse, the final purchase price, any commissions paid, notes of any special circumstances—such as the buyer forgoing a pre-purchase exam—and the signatures of all parties involved in the sale, including the buyer, seller, the trainer helping to broker your horse’s sale, and any other agent involved on the buyer’s side as well.
The agreement between you and the trainer helping you to sell your horse can be a physical contract or it can simply be an email exchange, but it should include written verification of the duties that you expect the trainer to carry out on your behalf and the percentage of the sale price that you agree to pay as commission. These terms should be agreed upon before any efforts begin to sell your horse. If you are looking to receive a certain amount of money for your horse’s sale, when determining the sale price you may also want to factor in the commission percentage—often between 10 to 15 percent—that could be taken by both your selling agent and any trainer or agent used by the buyer.
With those in place, you should have no doubts as to the validity and honesty of your horse’s sale, and, with or without any paperwork, I firmly believe that more often than not, common sense is all that it takes. It’s that transparency in the discussion with the buyer, including the breaking out of the funds and how they’re spent. That would always be where I would start.
Armand Leone, Leone Equestrian Law
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About the Author
Armand Leone is the founding partner of Leone Equestrian Law LLC, a New Jersey-based law firm that provides legal services and consultation for equestrian professionals ranging from riders and trainers to owners and show managers in the FEI disciplines on a wide variety of issues. Learn more about Leone Equestrian Law LLC at equestriancounsel.com, on Facebook, or by emailing email@example.com.