Client / agent relationships ...

[TrueColours]

I hope there are some lawyers on this board that can shed some light on this dilema ...

A friend of mine had a lovely youngster in for sale for one of her clients. She backed her and got her to the walk / trot / canter stage and they were starting over some jumps. During the course of the time this youngster was with my friend, she discovered some major "issues" with the mare that have made her VERY uncomfortable about recommending her to any prospective buyers.

The mare had not sold and has gone back to her owners.

My friend and her client had a standard contract in place with regards to who is responsible for what - expense wise - and what commission my friend would get if/when the mare sold, but NOTHING along the vein of not dispensing *confidential* information. It was never discussed verbally, nor did it form an integral written part of the agreement. It was simply not even mentioned by either party ...

So ... fast forward to a few months later, and an acquaintance within the horse world went to look at this mare and contacted my friend and said she is very interested in this mare, what can she tell her about her from the time she was with her and my friend divulged some information on the mare that she was not comfortable with that she had learned about when she was the agent for the mare and the client.

Faster than you can say "Fluffy has issues" she received a lawyer's letter stating that she "had a fiduciary duty to not divulge anything she learned about this mare during the time she was on her premises to any prospective buyers that may contact her". That basically - for the rest of her life she was legally bound to shut her mouth or face a lawsuit, if ANYTHING ever arose on this mare

My legalese is limited at best. I believe this is an official looking scare tactic and nothing more. In my world, once a contract has expired or has been terminated, any/all fiduciary duties or obligations also end at that time. I just cannot fathom that they last until the day everyone dies or you risk getting slapped with a lawsuit ...

Is that correct? Is there a finite term for fiduciary obligations to end or do they really stay in place forever???

[pfrsue]

I'm not a lawyer, nor have I ever played one on TV. I don't know what compromises "issues" in this case.

But if, for instance, the issue was dangerous, (a habit of flipping over backwards on the rider, for instance,) and someone asked me about the horse and I didn't tell them--I'd worry much more about being responsible/liable for injuries that the horse might cause, than I'd be worried about a former client having their nose out of joint because I was forthcoming with the truth.

I think it's a scare tactic, more likely than not. "Intentionally misrepresenting" the horse would be more vulnerable to a lawsuit, I'd think. Kind of like libel or slander.

[cng]

When ever you take on the role of "agent" there is a fiduciary responsibility that goes with it. An agent must put the interest of the client above, even his own. Most "agents" never fit this obligation but most "agents" only look out for their own best interest, they are not "agents" or in violation of the law. I think your friend would lose in court, if the term agent was ever used in the agreement. If the word "agent" was not used she might be in the clear. The common law of agency carry's a lot of responsibility.

[TrueColours]

The "issues" are not soundness or behavioural related so if the horse in question DID flip over and hurt someone, it would be a freak occurence and would not have ever occured before

[pfrsue]

The "issues" are not soundness or behavioural related so if the horse in question DID flip over and hurt someone, it would be a freak occurence and would not have ever occured before

Which is why I said, "for instance."

[TrueColours]

cng - I agree with everything you are saying WHILE she is the agent. But if the contract was terminated 1 month ago or 6 months ago or 1 year ago, does the fiduciary obligation still exist TODAY or did it end at the termination of their contract? And does it rollover for one day / one week / one month / one year AFTER a contract is terminated or what???

Is there an actual legal precedent that has been set and carved in stone that applies to these things?

[madelyn]

What other issues could there be besides behaviour and soundness that a trainer should provide information on?

My first instinct would be to step the heck out of there. I could answer questions as to what training I provided for the horse and how she responded. I could provide a generic caveat - ie: as a horseman I recommend a prepurchase veterinary inspection. Regarding any "personal" observations regarding fitness for an intended purpose, etc., my response might run to "I'm not qualified to comment as I don't have enough information to render an opinion" much the same way as Accountants' Comments differ from an "Auditor's Statement" on financial statements. The mare's owner was, after all, a CLIENT.

I hope I'm never in a situation where I have one of my horses betrayed like that.

[TrueColours]

Madelyn, I was asked the same question on another forum I posted this on ...

This is NOT the issue with this mare, but - from my OWN experience, other than soundness or behavioral issues in a horse I was selling or I knew was for sale were these 2 gems:

- a mare came from a line that was known to thrown horrible genetic defects through the sire line. Even when it was not present in the direct offspring, it would skip a generation and be evident in the NEXT generation instead. Wouldnt YOU want to know that your perfect looking broodmare or stallion prospect stood a VERY good chance of passing on this same genetic defect to their offspring even though they looked perfect themselves?

- a horse for sale came from a *questionable* background. Anyone purchasing this horse stood a very good chance of losing it and/or being tangled up in a court case in later months or years without any recourse to get the money they paid for it, back again

So ... it doesnt always have to be soundness or behaviour related even though I'm sure those 2 form most of the problems regarding horses and their "issues" !

[cng]

cng - I agree with everything you are saying WHILE she is the agent. But if the contract was terminated 1 month ago or 6 months ago or 1 year ago, does the fiduciary obligation still exist TODAY or did it end at the termination of their contract? And does it rollover for one day / one week / one month / one year AFTER a contract is terminated or what???

Is there an actual legal precedent that has been set and carved in stone that applies to these things?

LEGAL CONSEQUENCES OF THE AGENCY RELATIONSHIP:
LIABILITY
Common law – the principal is responsible for the acts
of the agent and sub-agent
TRELA – no liability for unknown misrepresentations – if a
misrepresentation is discovered the principal must correct it
NOTICE
Notice to the agent is notice to the Principal
CONFIDENTIALITY
The duty of confidentiality continues even after the agency
relationship terminates
Common Law of Agency

[TrueColours]

Interesting cng - thank you ...

So in reading that interpretation, it sounds like the confidentiality aspect continues on until-you-die-or-maybe-even-longer ...

Gadzooks - there are a WHACK of people in every field imaginable then that are in serious breach of fiduciary responsibilities who were the former agents of different individuals!

[cng]

Interesting cng - thank you ...

So in reading that interpretation, it sounds like the confidentiality aspect continues on until-you-die-or-maybe-even-longer ...

Gadzooks - there are a WHACK of people in every field imaginable then that are in serious breach of fiduciary responsibilities who were the former agents of different individuals!

A "true agent" is under the same agent/client confidentiallity responsibility as a lawyer or doctor. Most people who call themselves agents have no idea of the responsibility the tag entails. You are much better off to call yourself a sales facilitator and avoid the grief.

[madelyn]

In my opinion, your friend should have discussed her concerns with her client, the seller of the horse. If she felt COMPELLED to divulge her "secret" knowledge (gosh this sounds like high school bathroom gossip) about the filly, she should have made it CLEAR to her client first that she intended to tell all if anyone contacted her for a reference for the horse. It sounds to me like what she did was quite underhanded, in torpedoing the sale of the client's horse without first making the client aware she was going to do that. Certainly, she should expect that client to NEVER DO BUSINESS WITH HER AGAIN. To me she sounds entirely dishonorable and unreliable.

Regarding your other two cases - the genetic defects that *might* be passed by breeding stock - again as an agent, I would discuss those flaws in the sale prospect with the SELLER first. The ownership wrangle horse - I would refuse to represent that horse or get involved.