Buyer beware in stock exchange

QI am a suckler farmer and I have been selling animals in the mart over the last few weeks. I noticed on a few occasions that the animals in the ring did not appear to match the description of the animal that was displayed. If an animal is described in a certain way and then turns out not to be as described, do I have any case against the mart?

AThe buying and selling of farm animals through marts has undergone some change over the years and it is well worth knowing the legal implications attached to the sale of animals under specific descriptions such as ‘breeding heifers’, ‘in calf heifers’, ‘breeding bulls’..

Consumer law doesn’t apply to the sale of livestock. Instead, the rules which apply to the sale of farm animals are the ‘normal’ rules of contract law. Essentially, the buyer and seller are bound by the terms and conditions of the sale. The difficulty with the sale of animals at marts is that there is often no conversation between the buyer and seller and it is very difficult to establish the actual terms and conditions of the sale.

Case law in Ireland has established that if you describe an animal in a particular way to the purchaser and if the animal does not meet that description after the sale, the seller has effectively breached the contract. The purchaser is entitled to seek the return of the purchase price and also to get compensation for expenses incurred such as the feeding of the animal since the time of sale. This is called recission of the contract.

Difficulties often arise in cases where the purchaser of the animal only discovers that the animal is not as described some time after the purchase has taken place.

For example, if a farmer buys a ‘breeding bull’ and feeds him and keeps him in good condition for a number of months before discovering that the bull is in fact infertile, then the question arises as to whether he is entitled to compensation for the amount of money he spent in keeping the animal and the potential loss of profits which he would have made had animals gone in calf etc.

It is fairly clear cut that the farmer would be entitled to the cost of keeping and feeding the bull since the purchase. In relation to loss of profits resulting from the failure to put cows in calf, the courts are generally happy to award damages on the basis of the probable loss of profits - the amount of profit which the farmer would have likely made if the bull had in fact been fertile. However, to receive compensation for both of these loses there is a significant caveat - the purchaser must be able to show that the bull, in this instance, was infertile at the time of the sale.

In relation to animals which are sold without a specific term attached, the old rule of ‘buyer beware’ applies. Unless there is a representation made, for example, the animal is ‘a pure- bred Charolais’, the buyer is responsible for accepting the animal as it is shown in the ring. You will notice in many marts that they display signage which exempts them from liability of this sort.

Where animals are sold in specific sales such as ‘a breeding heifer sale’, the courts would be very likely to find that if she is incapable of breeding the purchaser would be entitled to rescind the contract and seek his money back, along with the other costs involved.

Purchasers should always keep in mind that they are under an obligation to ‘mitigate their loss’ if they feel that the seller has breached the contract.

This means that, in essence, they must make every effort to keep their loss at a minimum. This would imply that you seek to return the animal to the seller as soon as possible after a defect is discovered so that losses are kept to a minimum.

This would also imply, for example, that if you strongly suspect that a bull is not getting animals in calf after a Do reasonable period of time, a different means of fertilisation -- e.g. a different bull or artificial insemination -- is adopted to reduce the loss of profits caused by animals not going in calf.

The courts will generally not allow a purchaser to claim large amounts of money which are in part caused by his/her own failure to act in reasonable time to keep the loss at a minimum.

It is also important to be aware of the rules of the mart where animals are bought.

For instance, the majority of sales are held in marts which include in their rules that the mart itself does not form part of the contract between buyer and seller and so the buyer would not have any recourse against the mart if s/he subsequently discovers a breach of contract.

Marts are under an obligation to publish their rules and these are generally displayed in the mart or on their websites.

CONSUMER LAW DOESN’T APPLY TO THE SALE OF LIVESTOCK

Theresa Murphy is a barrister based in Ardrahan, Co Galway. The contents of this article are a general guide only.