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A Look at Dog Sales & Puppy Lemon Laws
Posted on 10/08/2011 in Your Dog, Your Rights.

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by Sara Chisnell, UKC Legal Counsel

The pet industry is enormous in this country, and the sale of dogs is a large portion of the industry. While most Americans consider their dogs their companions and part of the family, under the law they are considered “goods”, and as such really have no higher legal status than other goods, such as a car. However, the laws that govern transactions between sellers and buyers of goods give them certain rights, protections, and responsibilities. Many states have also enacted what are referred to as “puppy lemon laws”. A very poorly written one has just been introduced into the Michigan Senate. This article aims to outline the legal rights and ramifications for both buyers and sellers of dogs to consider in their transactions, and to discuss “puppy lemon laws”, the Michigan bill in particular.
Article 2 of the Uniform Commercial Code (UCC), which governs the sale of goods, encompasses animals and also their unborn young, and thus encompasses the sale of dogs. Both written contracts for sales of dogs and handshake or oral agreements fall under the doctrines of Article 2 of the UCC. All states contain the UCC as their law, except for the state of Louisiana.

If there is a written sales contract involved in the sale of dogs, anything contained in that contract will dictate the terms of the sale. Buyers need to read any sale contract carefully to make sure they agree with all the terms. If the dog in question is worth a considerable amount of money, the buyer may even want an attorney to look the contract over and potentially even negotiate to obtain for the buyer the terms they need. Written contracts are in most cases binding, and if the contract releases the seller of liability, it is usually enforceable.

As to the sellers of dogs, they should avoid using form contracts in their sales. While these forms are cheap and easy, they are cheap and easy for a reason. Many contain unenforceable terms or have very generic language that doesn’t cover terms that the seller is even aware the contract should contain. The best way for a seller to get a correct sale, puppy, or even breeding contract, is to have an attorney write a contract that they can continue to use for future sales or breedings.

What warranties are there in dog sales?
1. Express Warranties
Express warranties are those made, either in writing or orally, by the seller. These warranties can arise whether or not a written contract exists. So while there might be a written contract disclaiming warranties, express warranties cannot be disclaimed. Express warranties are created by:
(a) any affirmation of fact or promise made by the seller to the buyer which relates to good and becomes part of the basis of the bargain; and
(b) any description of the good which is made part of the basis of the bargain. This means that if the seller makes promises that a pup is healthy, or that a coonhound is an excellent hunter, and the buyer is specifically looking for a healthy pup or an excellent coonhound, then express warranties exist. Advertisements making promises or stating facts can also be construed as express warranties. Thus, using the previous examples, if the pup is sick, or the coonhound has no hunting abilities, the seller could be found liable. The best way for sellers to protect themselves from liability of express warranties would be simply to not make any.

2. Implied warranties of merchantability
This is a special implied warranty arising to sales under the UCC that applies only if the seller is considered a merchant under the law. Under Article 2 of the UCC a merchant is defined as “a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill particular to the practices or goods involved in the transaction.”

Basically, this means breeders, kennels, or pet retailers/dealers could be considered merchants. It excludes the occasional hobbyist breeder, accidental breeding, or casual or inexperienced sellers.

The implied warranty of merchantability promises that the good will be “merchantable”. How is a dog “merchantable”? Well, under the law it should be “fit for the ordinary purpose for which such goods are used.” When it comes to animals, this is a bit of a murky area for the law. At the very least, it means that the dog must be in good health, free of diseases. Most of the law out there dealing with animal sales and implied warranties of merchantability is about horse sales. An example of one such case, a racehorse was purchased at an auction, and found to later have some leg problems. The court found that as the problems did not prevent the horse from racing, there was no breach of the warranty, as the horse was still fit for its ordinary purpose, which was racing.

Sellers found to be in breach of implied warranty of merchantability are strictly liable, meaning that it does not matter if they could have discovered the “defect” prior to the sale. Latent defects, those which are not obvious or discoverable by a reasonable inspection by the buyer, are also a potential liability. For example, a horse buyer later found out a horse had three screws in its back leg from a break at one time, and the court found the seller liable. The defect making a dog unmerchantable does have to be traceable to have been in existence when the dog was sold, however. If it is a disease or problem that occurs later, and was not something that existed when the seller sold the dog, then there is no breach of the implied warranty of merchantability. Courts may find a breach if the defect is a genetic or congenital condition that could have been tested for in the parents.

Implied warranties of merchantability can be disclaimed, or waived by the seller. They can be disclaimed orally or written into the contract itself (best method). The seller must word it properly and specifically include the word “merchantability,” and be very clear to the buyer that no warranties of merchantability apply to the transaction. Thus, if no disclaimers are made, the warranty is automatically applied to the transaction, which is why it’s considered an implied warranty.

3. Implied Warranty of Fitness for a Particular Purpose
In addition to the implied warranty of merchantability, many breeders and sellers are not aware they may be making another implied warranty of fitness for a particular purpose. An implied warranty of fitness has a few key distinctions from the implied warranty or merchantability. First, the merchantability warranty only applies to merchants, while the fitness warranty can be imposed on any seller. Also, while the merchantability warranty warrants the goods are fit for the ordinary purpose used, the fitness warrant guarantees that the dog is fit for the particular purpose that it is purchased for.

There are three elements necessary for the fitness warranty to arise:
(1) that the dog is to be used for a particular purpose or specific reason;
(2) that the seller is aware, or would have reason to be aware that the buyer is purchasing the dog for a particular reason; and
(3) the buyer of the dog relies on the seller’s skill or judgment to select the dog. For example, say a buyer is looking for a good bird dog with strong pointing instincts. The buyer goes to a reputable kennel that specializes in bird dogs, and the buyer asks that the seller help them choose a dog with strong pointing instincts. When the buyer takes the dog hunting, it shows no inclination or interest in birds. This could be a breach of the implied warranty of fitness for a particular purpose.

However, if the buyer is just as knowledgeable as the seller, there cannot be any reliance placed on the seller, and then there is no breach. Also, if the buyer has another party helping them select the dog, there is no reliance on the seller to help the buyer, and no breach. This warranty may be really hard to prove with puppies, if a buyer is purchasing it for show or competition purposes, as there are so many other variables involved in success in those arenas. However, if the dog is purchased for show, breeding, or competition purposes, and does not meet the breed standard, the seller may be liable. The breed standard would most likely be irrelevant if the dog was purchased with the purpose of being a companion or a pet.

As with the merchantability warranty, the fitness warranty can also be disclaimed in a transaction. Unlike the merchantability warranty, however, the fitness warranty cannot be orally disclaimed but must be in writing and conspicuous to the buyer. So if a dog is sold through a handshake deal, the seller cannot disclaim the implied warranty of fitness for a particular purpose.

Defenses For Sellers

As previously mentioned, the two types of implied warranties can be disclaimed, while express warranties cannot. The implied warranty of merchantability must be disclaimed by using the word “merchantability” specifically in the disclaimer, either orally or in writing (better). Disclaimers for the implied warranty of fitness for a particular purpose must be in writing. If these disclaimers are done properly by the seller, the buyer cannot bring a cause of action against the seller if they are breached. It’s best for the seller to use a written contract, as oral warranty disclaimers can be very hard to prove.

The buyer’s failure to inspect the good before purchasing can also be a defense for the seller. If a buyer has either inspected the dog as fully as he or she desired, or refused to inspect the dog, they cannot later sue for breach of implied warranty with regards to defects that they could have seen on inspection. This would only apply to defects that are discoverable, meaning those that would be obvious to the buyer. This possibility may also arise if the seller gives the buyer possession of the dog, and gives them a window of time where they can have it inspected by a veterinarian and return the dog if there are any defects. If any defects that could have been discovered by a vet during that window of time arise later, the buyer will most likely not have any right to recover from the seller.

Remedies For Buyers

Traditionally, the remedy for defective goods is recission, which means canceling the contract. The buyer would return the non-conforming or defective goods to the seller and the seller would return the purchase price. In the case where the good is a dog, many buyers have already become emotionally attached to the dog, and returning it is then out of the question.

Buyers can also attempt to seek return of the purchase price for the unfit dog. In most cases where this is the remedy sought, the buyer may only get the difference between the purchase price and what the dog is actually worth. So, for example, if a person purchased a purebred dog intended for conformation show purposes, and the dog has some sort of defect that makes it acceptable pet quality but disqualifies it as a conformation dog, the buyer would get the difference between what the dog was purchased for and what the breeder usually sells pet quality dogs for. Some states have added additional layers of remedies for buyers on the bad end of a dog deal in the form of pet sales consumer protection laws.

State Pet Sales Laws

The majority of dog sales are the sale of puppies. Many states have laws that either set a minimum age for puppy sales, or set forth how old a puppy must be before it is offered for sale or adopted out. Most set the age at 8 weeks, some at 7 weeks, and one (Nebraska) has set the minimum at 6 weeks. A couple of states don’t explicitly state an age in numbers but require that the puppy must be weaned from its mother.

Twenty states have “puppy lemon laws”. These laws attempt to recognize that animals are distinct from other inanimate goods, and that they are living, unpredictable beings unique from the goods the UCC is intended to encompass. This provides for additional remedies as traditional concepts of recission are not always options for dog owners. These laws are also aimed at helping to deter irresponsible and indiscriminate breeding. While the original intent was directed at pet retail and pet stores, sadly breeders have been lumped in some of these laws as well.

The pet sale laws differ from state to state, but all have common components. Most state that the rights and responsibilities of the seller and buyer must be disclosed before the purchase, either in written contract form or posted in the store, or even both in some states. Sellers who fail to provide this language may face civil penalties or loss of their retail license.

The basis of claims brought under “puppy lemon laws” is misrepresentation on the part of the seller. Most states require that the buyer show, through a veterinary statement, that the disease or illness that they are seeking damages for existed at the time of sale. They do not need to prove that the seller had knowledge or even should have known of the illness. Many laws attempt to define illness and disease, and specifically exclude parasites.

The buyers themselves must also comply with certain requirements when bringing a pet sales law claim. Most laws have a time limit for the buyer to return the dog or otherwise make the seller aware of a defect. Generally the time limit is between 7 and 15 days for a dog with a disease or illness. Some states have provisions for congenital or genetic conditions that do not appear or develop immediately. The time limits for congenital and genetic conditions run from two months to two years, depending on the state.

All of the states with pet sales laws mandate that the defect be certified by a veterinarian. The defect can be a disease, illness, or congenital or genetic condition. The defect cannot be a problem common to dogs, such as parasites, unless the condition causes the animal to be ill. Neither can the defect be an illness or injury contracted subsequent to the buyer acquiring the animal. Further, the disease or illness must have been in existence or traceable to the time the animal was purchased.

The remedies available under the pet sales laws are three different options:
1. The buyer can return the animal and the seller must reimburse the purchase price and potentially the veterinary costs of certifying the dog’s defect.
2. The buyer can return the animal and the seller provides an equivalent replacement plus potentially the veterinary costs.
3. The buyer can retain the animal and recover from the seller the cost of veterinary care to fix the defect. Most states limit the amount a buyer can recover from the seller to the amount the purchase price was, but California allows the buyer to recover up to 150 percent of the purchase price.

Buyers cannot receive damages if the defect was due to their negligence, if they do not provide documentation, or the defect occurs subsequent to the buyer taking possession of the dog. Some states also provide additional requirements to dealers selling registered dogs, such as the seller must provide to the buyer the registration numbers of the sire and dam, and the contact information of the person who bred and sold them the dog.

Michigan Senate Bill 574 is so broad it would apply to basically anyone who sells a dog or cat. The bill is very poorly written and leaves far too many gray areas. It does not define what should be included under illness, disease, or even congenital defects. It goes beyond most states, and allows 30 days for illnesses. There are no exemptions mentioned in the bill, so as it currently reads, parasites may be considered an “illness”. There is no timeline or procedure to resolve the issue before the parties may go to court, which opens the floodgates to unnecessary litigation.

These “puppy lemon laws” are not really necessary for many reasons. In this day and age of information technology, the public may easily educate themselves on what to look for in purchasing a puppy. The sale is a private deal between buyer and seller, and they should negotiate their own terms of sale. This bill doesn’t speak to whether a contract containing waivers could override the remedies presented in the bill. If the buyer and seller do not have a contract, that’s where the Uniform Commercial Code will come in to properly address certain warranties. There are mass amounts of available information on the downsides of purchasing a pet from a store, the public should make themselves aware of the possible pitfalls of purchasing a puppy from a retail store. What has happened to the idea of caveat emptor (let the buyer beware)?

Most other states have enacted these laws directed at pet retailers, as one could say that a retailer may have more sophistication and therefore the upper hand in making a sale. It’s also true that many in the public do not educate themselves prior to purchase, or, cannot resist a cute face in the window despite being armed with that knowledge. Some even feel they are “saving” these dogs from “puppy mills”. If the legislature feels that is the case, and that this law is absolutely necessary to protect the public of Michigan, then it should only apply to retail pet stores, and not private breeders who should be free to negotiate and contract as they see fit. I urge all Michigan dog owners to contact their Senators and give their input on this bill.

The bottom line is that both buyers and sellers should take care when entering into a dog sale. There are always potential legal ramifications when sales go bad, affecting both parties with possible financial loss and emotional distress. These pitfalls can be avoided with well written sales contracts. It is greatly beneficial for both parties to have the transaction reduced to writing, so all terms are visible, and should the parties litigate the issue, the court need only look to the contract.