HOW-TO SESSION: PRE-PURCHASE EXAM FOR THE WESTERN HORSE


your exam and that they are entitled to damages as a result.


Agency


Agency, or acting as an agent for someone, is a common term used in the equine industry. Legally defined, it is a relation, created either by express or implied contract or by law, whereby one party (called the principal or constituent) delegates the transaction of some lawful business or the authority to do certain acts for him or in relation to his rights or property, with more or less discretionary power, to another person (called the agent, attorney, proxy, or delegate) who undertakes to manage the affair and render him an account thereof.4 Documenta- tion and acknowledgment of agency power is recom- mended when dealing with anyone alleging to represent another in any way in a pre-purchase exam scenario.


Misrepresentation


A claim for misrepresentation arises where one party makes an untrue statement of fact that in- duces the other to enter into a contract.5 While you as the veterinarian are not party to the contract per se, your expertise may be viewed as proximal cause to the inducement to enter into the contract. This can be made evident through a “but for” analysis in a court of law, where the complainant may allege that “but for” your misrepresentation, they would have not entered in to the contract to purchase the horse.


Negligent misrepresentation is defined as “where


the misrepresentation was made carelessly or with- out the representor having reasonable grounds for believing its truth.”5 As an example, a case may be where a veterinarian represents the horse as being sound while overlooking a lesion in a radiograph that is later discovered to have been apparent at the time of the exam. Innocent misrepresentation is one that has in-


duced a party into a contract, but the person mak- ing the misrepresentation had reasonable grounds for believing it was true at the time the represen- tation was made. A claimant who has been the victim of innocent misrepresentation can still pursue damages, but he or she cannot pursue re- scission.4 Misrepresentation, negligent, and in- nocent misrepresentation can all give rise to a claim for malpractice.


Puffery


Puffery is a statement that is “puffed up” to make something sound better than it truly is. While not necessarily a misrepresentation, it is a statement that no reasonable person would actually interpret as a statement of fact. It can be interpreted differ- ently, however, depending on who is saying it. For example, if the seller of the horse makes the statement, “this horse can turn on a dime,” this is a form of puffery. However, if you as a veterinarian


480 2019  Vol. 65  AAEP PROCEEDINGS


perform a pre-purchase examination on a horse and make the statement that “this horse ought to be able to turn on a dime,” this could rise to the level of innocent misrepresentation if it is later shown that the horse in fact cannot “turn on a dime.” This type of statement is unnecessary from the veterinary per- spective. It can influence the buyer’s decision and has no specific scientific evidence to support it. Because of your role in the pre-purchase exam, as


a veterinary professional with an unbiased position you are held to a high standard. Remember, your job is to conduct the exam and report your findings. Do not get caught up in the enthusiasm of the trans- action. No statements of puffery should ever exist in your communication. Refrain from making any judgments or statements that could be overly influ- ential to the buyer about the horse’s ability. Again, this is not necessarily misrepresenting the truth, rather, it is making statements that could be misin- terpreted by the buyer that can influence their de- cision making and are not grounded in good science.


Warranty


Express Warranty is a promise about the character of an item made by a seller used in negotiations. It is part of the contract of sale for acceptance pro- cess. A seller doesn’t need to use the word war- ranty to make it one.6 While you are not the seller in the pre-purchase exam, your role in the potential purchase of the horse and the reliance on your ex- pertise can give rise to a claim for warranty without proper documentation and communication of dis- claimer of such. Warranty of Fitness is the specific type of war-


ranty that may be interpreted by your client. This type of warranty is a form of express warranty that the item being sold is suitable for the purpose in- tended. From a client’s perspective this can be the reason that your exam is being sought out in the first place. Buyers want assurances before spend- ing money. Your role is a step in gaining that as- surance. The assurance being sought is that the horse will be healthy and sound and suitable for the purpose intended by the buyer. This underscores the need to obtain written and signed documenta- tion that your exam is not to be interpreted as being a warranty of any kind, fitness or otherwise.


5. Conclusion


Remember, the purpose of your exam, is to provide an unbiased scientific opinion to a client as to the suitability of the horse for the purpose that the client intends from a health and wellness perspec- tive.7 In addition, you must be able to effectively communicate to the potential buyer the significance of the findings and provide an opinion as to the functional effect of these findings in writing promptly after the examination is completed.7 By developing a systematic approach, providing complete disclosure, understanding the legal issues involved, utilizing documents prepared by an attor-


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