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An oral agreement is legally valid, but without a written record, the judge must reconstruct what the parties truly meant afterwards — with all the associated uncertainty and costs. The seller of the famous stallion Totilas experienced this firsthand: the judge ruled that the exclusive breeding rights were included in the sale, despite the absence of a contract. Below, you can read the case and the lesson for your own agreements.
What was the case about?
Years ago, a Dutch horse breeder sold his stallion Totilas to a German horse breeder and dealer. After the horse's death, the original owner offered the still-frozen semen for sale. The German buyer disagreed: according to him, he held the exclusive breeding rights, which were included in the purchase. The seller argued otherwise. The purchase agreement was concluded orally, and ultimately the case had to go to court (ECLI:NL:RBGEL:2023:706).
Was the exclusive breeding right part of the purchase?
Before legal proceedings ensued, the German company had attempted to purchase the remaining semen. When that yielded no results, legal proceedings followed. The seller sought permission from the court to continue offering the semen, arguing that the exclusive breeding rights were not part of the oral sales agreement. The buyer disputed this.
How did the judge rule without a contract?
Due to the lack of paperwork, the judge had to determine what the parties had intended and actually agreed upon, taking all circumstances into account. In doing so, the following weighed in, among other things:
- Witness statements: according to witnesses, after the sale the seller had also delivered a freezer with frozen semen to the buyer — not a small extra, but worth hundreds of thousands of euros. To the judge, this was an indication that the breeding rights were included in the purchase; a “gift” was unlikely.
- No trade for ten years: the seller had not traded in semen again until the death of the horse, about ten years after the sale.
- The buyer's attempted purchase: the seller viewed the fact that the buyer wanted to purchase the semen as an acknowledgment that the buyer did not possess the breeding rights. However, the buyer argued that he wanted to avoid costly legal proceedings — an explanation the judge found plausible.
The judge ruled that the exclusive breeding right formed part of the purchase agreement and that the former owner was no longer allowed to sell the semen.
The lesson: a written agreement prevents many problems
This case shows how much trouble an oral agreement can cause. If it had been recorded in writing that the exclusive breeding rights were also being transferred, the outcome would have been immediately clear and costly proceedings would have been avoided. Especially when significant interests are at stake, it is wise to put the agreements properly in writing.
Frequently Asked Questions
Is an oral agreement legally valid?
Yes. For most agreements, there is no formal requirement, so a verbal agreement is binding. The problem lies in the proof: what exactly was agreed upon?
How does the judge determine what was agreed upon in an oral agreement?
The judge examines what the parties intended and actually agreed upon, based on the circumstances, conduct, and evidence such as witness statements.
Why is a written contract important?
It unequivocally establishes what has been agreed and who receives which rights. This prevents disputes and costly proceedings, especially involving significant interests or special rights such as an exclusive right of use.
What do I need to record when selling special rights?
Explicitly record which (ancillary) rights are being transferred, such as an exclusive breeding, licensing, or usage right, and which items are included. Have this legally reviewed if in doubt.
Have a written sales agreement drawn up?
Good written agreements prevent uncertainty and legal proceedings. We draft a clear sales agreement for you, in which special rights are also unambiguously regulated.
View our sales agreement or our expertise in contract law, and schedule a no-obligation intake meeting.
