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  1. #1
    Join Date
    Jun. 24, 2004
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    Question Leaving a deposit - how does that work?

    I might go look at a horse that is several hours away and if I like him, would want to leave a deposit to hold him until the vet check.
    How much should I leave? 5%? 10%?
    Under what condition? Owner keeps it if I don't show up again in a certain number of days? I get it back is something significant shows up during PPE? It becomes part of the purchase price if/when I buy the horse?
    Is there some sort of form we would both sign spelling this out?
    A friend told me I was delusional. I almost fell off my unicorn.



  2. #2

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    I don't think there are any standards. It's whatever you are both willing to agree to, and absolutely get that down in a written contract.

    Most likely, though, you should not expect to get the deposit back. Applied to the purchase price if you buy, sure, but that's it. So on your side, make sure the deposit amount is one you are willing to lose if you don't buy the horse.

    Basically, you are paying to have the horse off the market. The seller is risking that another interested party may call up and then scratch the horse off the list when they hear there is a deposit on it. So if you don't buy, the seller may very well have lost that other potential sale, too. Your deposit compensates them for that risk.


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  3. #3
    Join Date
    Aug. 25, 2007
    Posts
    8,417

    Default

    A deposit is made when you decide to buy a horse but do not, for some reason, pay the entire amount. It is part and parcel of the sales contract.

    If you're going to contract to buy a horse then the agreement should, at a minimum, include:

    Names and addresses of the parties.
    Name and identifying ID info on the horse.
    Price to be paid.
    How and when the price is to be paid.
    Where and when the horse is to be delivered.
    Who pays for delivery if delivery is to be away from the seller's barn.
    Any contingencies (PPE, etc.).
    Any other terms and conditions.
    Signature of both parties (I write my contracts up with duplicate originals and buyer and I each get one).

    Unless you're dealing in Olympic level performance horses a good contract should take no more than one side of one 8.5 x 11 piece of paper in 12 point type.

    If you feel you must have a long, convoluted writing because you really just don't trust the opposite party then you probably should walk away from the deal and find another horse. Life is too long to deal with thieves, charlatans, mountebanks, and scoundrels.

    If the contract has contingencies (such as a PPE) they should be set out clearly in a separate paragraph of the contract. The contingency should be clearly and concisely set out, including what happens of the contingency fails.

    Use the KISS principle in drafting.

    G.
    Mangalarga Marchador: Uma Raça, Uma Paixão


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  4. #4
    Join Date
    Aug. 17, 2004
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    What Guilherme said! I take a deposit to hold a horse for a PPE. Although the horse is technically still on the market, the deposit gives you first right of refusal based on the PPE. My contract makes all deposits refundable. If the buyer does not want to purchase after the PPE (and it doesn't have to be for any reason from the PPE), then I give the deposit back. My contract outlines the terms of that refund. I would not leave a deposit without a contract nor would I accept a deposit without a contract.
    Where Norwegian Fjords Rule
    http://www.ironwood-farm.com


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  5. #5
    Join Date
    Jan. 17, 2008
    Location
    New England
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    Default

    Once upon a time, I went to look at a horse several hours away. I liked her and wanted to return to ride her again, and do the PPE. I offered a deposit ($500) which was half the asking price, to hold the horse. The seller said NAH, that's OK! I insisted, I wanted her to know I was serious and did not want the horse to be sold. She still refused.

    Well, I didnt end up getting the horse due to a miscommunication (seller never got my messages or emails, trying to set up PPE, allegedly). She ripped me a new one, up one side of me and down the other, saying I was burning bridges in the business and so forth. I resent all the emails I had sent, and she claimed she never got them. But she never called me? Just sent more and more angry emails.

    Anyways, when I found my horse, I loved her on the spot, wrote a check for $500 as a deposit with the understanding that I would be given my check back when I picked her up in exchange for cash. I got a receipt and bill of sale pending pick up.

    Worked out awesome. Of course, I bought her from and attorney. So that helped.

    I'd leave enough as to say your serious. $50 is crazy, but unless the horse is under 1k, I'd leave at least $500. In a check.
    mykidshavefourlegs.blogspot.com



  6. #6
    Join Date
    Feb. 2, 2003
    Location
    Iowa, USA
    Posts
    2,232

    Default

    All great suggestions. If there's a provision to return the deposit, include a timeline for the return such as "within 15 days of notification".



  7. #7
    Join Date
    Jun. 24, 2004
    Location
    South Park
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    Default

    Would anyone have a copy of such a contract they would be willing to share? I am going to look at that horse tomorrow.



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