First refusal clauses sometimes lead to litigation in the horse industry. This can happen when horse buyers abandon their contracts and forget years later the promises they made. Sometimes these clauses are so unclear or unenforceable as written that the parties do not understand their rights and obligations. These steps are essential to ensure that a seller has a valid and enforceable RFR on a horse so that they can buy back the horse or bring an action for damages if the horse is sold without notifying the original seller. If you include « right of first refusal » clauses in your horse purchase agreements, design the wording with the utmost care and consider seeking legal counsel to assist you in the process. Horse sellers who rely on these clauses may want to remind buyers over time before the buyer puts the horse on the market. It can also help the buyer inform others that all sales are subject to a right of first refusal. RFRs are also convenient for less demanding sellers of lower-value recreational horses. The problem is that RFR agreements are often broken and sellers are unable to buy horses back when buyers get rid of them.  First, these agreements fail because, in many cases, they are unenforceable for lack of consideration. In many cases, one horse owner gives another a horse with no return value and makes a promise to the recipient not to sell the horse to the seller without notice. With such a free transfer, it is very unlikely that a court will enforce an agreement that gives the seller an RFR, even if it is written. To be binding, a contract must involve a reciprocal exchange of consideration between the parties.
 Therefore, it is advisable to always charge a small fee for the horse instead of giving it directly. Charging $5 or $10 for the horse makes the agreement enforceable. A second reason why RFR agreements fail is that they are not expressed in a written document. In many cases, the transaction takes place without any written contract. Even if a transaction contains a purchase agreement, the RFR provision is often agreed orally without being expressly stated in writing in the contract. In this scenario, the Parol Rule of Evidence may prohibit applicability, independently of other additional writings in support of the RFR agreement.  To avoid this, sellers should not only have a written contract, but should also express the RFR in the purchase contract. Here is an example of an rfR provision: A feature of many horse transactions is that the seller often links the sale of a horse to the buyer`s promise to notify the seller if the buyer wants to sell the horses and to give the original seller the opportunity to buy the horse back. This is called a right of first refusal (« RFR »). RFR regulations are often found in demanding transactions between racehorses and show horses.  In many cases, high-value horses are divided into shares and are jointly owned by several parties.
Shareholders of a horse use an RFR provision when they buy a horse together, so that when a shareholder receives an offer for their share, the other shareholders have the option of acquiring that stake in the horse.   Julie I. Fershtman, « First Refusal in Equine Contracts, » Equine Law Blog, March 6, 2012 www.equinelawblog.com/Rights-of-First-Refusal-Equine-Contracts. ; See also Black`s Law Dictionary 1521 (10th ed. 2014) (definition of the right to « initial refusal » as « the contractual right of a potential buyer to comply with the terms of a third party`s superior offer »). A « right of first refusal » is a right granted under a contract that requires the person who has purchased or received a horse, under certain conditions, to give the seller the opportunity to re-own the horse if or when the buyer wishes to separate from the horse. What are people`s rights if they believe someone has violated a right of first refusal?  Brad Butler, Realizing Value and Creating Protection: A Practical Approach to Monetizing the Value of A Racehorse while Retaining Control Over Future Interests, 7 KY. J. EQUINE, AGRIC.
& NAT. RESSOURCES L. 93, 113-14 (2015). The Seller reserves the right of first refusal if, at any time in the life of the horse, the Buyer cannot or does not want to keep the horse. If the buyer wishes to sell the horse, the buyer agrees to contact the seller and give him the first opportunity to buy the horse. .