Page 56 - 2312_full

This is a SEO version of 2312_full. Click here to view full version

« Previous Page Table of Contents Next Page »
Why You Should Consider
Having a Written Contract
When Buying a Horse in
By Lisa Hollister, Esq.
If you are purchasing a horse in Germany it will be
helpful for you to have a general understanding of
German contract law. According to Dr. Martin Feick, a
senior partner with the German frm of SZA Schilling,
Zutt & Anschuetz Rechtsanwalts AG, under German law
there are no general rules governing the binding effect
of contracts based on whether the contract is written or
verbal. German contract law operates under the principle
of “Freedom of Form” and as long as the contract does
not involve certain specifc types of transactions, such as
those involving real estate or the transfer of shares of a
German corporation, the contract is not required to be in a
certain form in order to be binding. Readers should note
that contracts involving the sale of horses do not require
a certain form to be enforceable. As a result, your frst
decision will be whether you want to have a written or
verbal contract.
While U.S. law does not require a contract for the sale
of a horse to be in writing, the Statute of Frauds (U.C.C.
2-201) requires that for a contract involving the Sale of
Goods over fve hundred dollars, it must be in writing to
be enforceable. For practical purposes under U.S. law,
all contracts for the sale of a horse should be in writing to
be enforceable. (However there are certain exceptions
such as partial performance, fraud and mistake.) As a
result, if you have a verbal contract to purchase a horse
in Germany for more than fve hundred dollars and the
agreement has not been reduced to writing you will have
little or no chance of enforcing the agreement under U.S.
law even if you would be able to obtain jurisdiction. Your
only chance of enforcing the verbal contract would be in
Germany under German Law.
Disputable Presumption in Written Contracts
under German Law
Under the German legal system there is a Disputable
Presumption that a written contract contains everything
that the two parties agreed upon. If the contract is in
writing both parties can look to the document and rely on
what is stated in the agreement. If a party attempts to
claim that something was agreed upon orally which was
not included in the written contract or that an agreement
was made contrary to the written contract, then that party
has to prove that such an oral agreement was actually
made and that it should be binding between the parties.
U.S. law has a similar legal concept, the Parol Evidence
Rule. Under Parol Evidence, only when there are special
circumstances such as a mistake, confusion of the terms,
fraud or course of dealing may the parties submit evidence
which is outside the four corners of the written agreement
(see UCC section 2-202). So in this regard, German law
is actually more fexible than U.S. law when it comes to
allowing verbal evidence to be admitted into evidence
when there is a written contract between the parties.
Diffculty of Proving
the Terms of a Verbal
Under both U.S. and Ger-
man law, if no written contract
exists, it is much more diffcult
for each party to prove the
facts favorable for their legal
position. Both legal systems
require the party who bears
the burden of proof to pres-
ent witnesses and evidence
to confrm their position. An-
other consideration is that the
witnesses are often less con-
vincing than a written agree-
ment signed by the parties.
Also, witnesses may not be
available when the legal matter gets to court. When your wit-
nesses are close friends or business associates their testimony
can be perceived as less convincing in the eyes of the court.
Therefore, even though written and verbal contracts generally
have the same binding effect under German law, it will undoubt-
edly be more diffcult to prove what has been agreed upon in
a court proceeding if the contract has never been reduced to
List of Issues One May Want to Consider Placing in a
Contract for the Sale of a German Horse
Dr. Feick specifcally recommends that when purchasing
a horse in Germany your written contract should specify any
characteristics or special qualifcations that the purchased horse
is claimed to have. If the contract fails to do so, German law
stipulates that the purchase good has to be of average kind and
quality. Additionally, Dr. Feick suggests that you include the terms
and conditions for the payment of the purchase price as well
as the currency in which the purchase is to be made, choice of
applicable law as well as the forum for disputes arising out of the
contract. To avoid a potential lengthy court proceeding, it is also
suggested that the parties may wish to agree upon an institution
and/or independent expert in the written contract who has the
authority to determine whether or not the horse has a defect/fault,
is of the same quality, and having the same characteristics as
agreed upon by the parties. Under U.S. law, unless an express
warranty (a verbal statement excluding opinions) is made as to
the horse, the horse minimally comes with an implied warranty
that it is ft for the purpose for which seller has reason to know it
was sold to the buyer. (U.U.C. 2-312)
While U.S. and German contract law are similar in some
respects, when you aremaking an overseas purchase it behooves
you to fnd legal counsel and have the terms reduced to a written
contract. Since most German sellers do not want to sign a
contract stipulating U.S. law and jurisdiction, it is recommended
that you contact competent counsel in that country and rely on
them to protect your interests.*
Dr. Feick is familiar with equine transactions and can be con-
tacted via e-mail at
Telephone: 49 (0) 621
4257 0
*Information on German Law was provided by Dr. Martin Feick,
Senior Partner SZA Schilling, Zutt & Anschuetz, Mannheim,
Lisa Hollister is an attorney
practicing in Cincinnati, Ohio.
Questions for Ms. Hollister’s
column can be addressed to