by Sara Chisnell-Voigt, Esq.
The pet industry is huge in this country, and the sale of dogs is a major 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 give them certain rights, protections, and responsibilities. This article aims to outline the legal rights and ramifications for both buyers and sellers of dogs to consider in their transactions.
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 sale contract involved in the sale of dogs, anything contained in that contract will preside. 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 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, 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 the 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.
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 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 would 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 parasites and diseases. Most of the case law out there dealing with animal sales and implied warranties of merchantability is regarding 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. Granted it may not be a successful racer, but it was still fit to race.
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. There probably will be 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 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 of 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 or general 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.
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 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, as solid proof of the disclaimer exists). Disclaimers for the implied warranty of fitness for a particular purpose MUST be in writing. If these disclaimers are completed 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, 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 vet 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 rescission, which means canceling the contract and returning both parties to the state they were in had the contract never happened. 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 will probably 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, discussed in the next section.
State Pet Sales Laws
The majority of dog sales are the sale of puppies. About 18 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.
Seventeen states have special pet sales laws applicable to pet retailers. These laws 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 rescission are not always options for dog owners. These laws are also aimed at helping to deter puppy mills.
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 state pet sales laws is misrepresentation on the part of the seller. However, most states require that the seller had actual knowledge of the animal’s defect, which the buyer would have to prove in court. 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 present 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 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.
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 a writing, so all terms are visible, and should the parties litigate the issue, the court need only look to the contract.