What is a Puppy Deposit Contract?

A puppy deposit contract is a legally binding agreement that outlines the agreement between a buyer and seller regarding the purchase of a puppy or dog. This contract may be one or two pages long, depending on the details that the seller includes. A seller can draft the contract themselves and use a form found online or they can hire a dog attorney to draft one for them. The contract should set out the details of the agreement in clear form regarding the buyer’s ability to "hold" the puppy for a certain period of time. The seller then receives a monetary amount depending on their agreement with the buyer.
There are many different forms of puppy deposit contracts. Some breeders prefer a simple one page agreement and will ask for more specific details only if a dispute arises. For example, a contract may simply state: "Buyer has paid Seller $250 to hold puppy until Buyer brings his family to meet the puppy on April 10, 2020." On the other hand, other breeds and sellers will include all binding terms in their puppy deposit contract. For example, the contract may state: "Buyer has paid Seller $250 nonrefundable deposit to hold puppy. Buyer agrees to finalize the sale and pay remaining balance within 7 days from today . No puppies other than the puppy described below are included in this sale. Buyer agrees that if they fail to pay the remaining balance within 7 days Seller can keep deposit amount as damages and puppy will be made available for sale to others. Buyer acknowledges that given Seller’s limited availability in marketing is largely undertaken one day per week, if Buyer fails to fulfill the obligations listed above Seller may not be able to refund any funds received. Puppy to be included in this sale is an AKC Golden Retriever male born on December 31, 2019 and is the second pick of the litter by male buyers. This puppy is dark golden in color and weighs approximately 12 pounds. Puppy is currently enjoying a diet of freshly prepared raw food. Puppy and parent dogs are fed raw diets based on a rotational menu."
Section 1 of the contract is the first part of a puppy deposit contract, and contains the name of the seller and the terms of the deposit amount. Section 2 contains the information about the dog and how much you owe in full. Section 3 lists out the buyer information and the refund status on the deposit and the other details of the sale. Section 4 details the legal considerations and how the contract will be enforced.

The Anatomy of a Puppy Deposit Contract

The essential components of a puppy deposit contract, like all contracts, are the parties’ names and addresses, the subject matter to be sold or delivered, a statement of consideration (the amount of the deposit), and a statement of the terms of the agreement. It is very important the buyer and seller are clearly identified and the attachments are accurately shown. In determining whether or not an "offer" was accepted or a "contract" was formed one of the factors a court will look at is whether the parties have agreed on all of the essential terms.
Buying a puppy is an excellent example of the "un-fetching" (legalese for "rejected" ) terms of the Uniform Commercial Code ("UCC") which requires that the material terms of an agreement be established or reasonably ascertainable. The UCC requires a contract, including a purchase agreement, to contain the following elements in order for it to be enforceable: (1) an offer and acceptance; (2) consideration; (3) definite terms; (4) parties with capacity to contract; (4) legal subject matter for the contract; and (5) intent to contract. Any contract component that is missing or improperly drafted is a "material breach" which allows any party to rescind the contract without legal liability.
It’s helpful to review each of these components as they pertain to the purchase of a puppy:

  • (1) The buyer and seller must be clearly identified (full name and address) on the contract. You (the buyer) should also be sure you have the seller’s full name and address so that you can send a demand letter if they fail to provide you with your puppy.
  • (2) The subject matter to be sold must be clearly identified by breed, color and any other identifying characteristic. Upload photos of both mother and father dogs and the litter. Include pictures of any similar puppy from a previous litter to help identify your purchase. Pictures at various ages for several previous puppies are very helpful. Many buyers are surprised at how little a puppy changes from birth to 8 weeks old so make sure you include various photos which become the contract’s "road map" from the time of birth through email and text message updates.
  • (3) The contract must contain a statement showing how much money is placed as a deposit and when the total price will be due along with a complete description of the puppy. Your funds should always be held in trust and only released to pay the breeder for the puppy once delivered or request payment for the puppy’s goods and services and never to hold the dog hostage.
  • (4) The contract must state what will happen if the sale is not completed; will your deposit be returned or will it be kept as consideration to be earned? Will the puppy be offered at a discount later for the same deposit amount? If the puppy dies or tears a nail before delivery, will you receive a replacement puppy? Be careful about what you agree to as some courts have found agreements to replace a dog are not enforceable unless the restatement clause is very specific on what they did and will do.
  • (5) The buyer and seller must have the capacity to contract. This means: (a) no intoxication when making the contract; (b) both parties over the age of 18; and (c) all those involved in the contract must be competent and authorized to enter the agreement.
  • (6) The subject matter of the contract must be legal; no agreement to sell a puppy that will be used to fight other dogs or rob local stores is enforceable or even morally acceptable.
  • (7) The parties must show the intent to contract. Typically this is done by adding the phrase "the parties hereto agree that the courts of ________ will have exclusive jurisdiction over any litigation arising from this contract." Until such time a court is designated the laws of that county, city or town may apply so be sure to ask your lawyer if you don’t know which law applies.

Understanding the Legal Framework in Puppy Deposit Contracts

In many states, the law requires contracts to contain specific elements in order to be enforceable. A contract will generally be unenforceable if it is missing a required element. The same goes for puppy deposit contracts, which are much like any other form of contract. Enforceability of a puppy deposit agreement requires a "meeting of the minds" on the terms. When an entity requires puppy deposits or fees, the written terms should be clear and unambiguous about refund policies and obligations of the parties. If a written agreement is provided, a buyer should read the entire agreement prior to signing, paying particular attention to the refund policy so that each buyer has an accurate sense of their obligations and entitlements under the contract.
Aside from enforceability concerns, puppy deposit refunds and the rights and obligations of the parties are governed by state law. Often, breeders provide potential buyers with a written "framework" for the agreement outlining the rights and obligations contained within the agreement as a general starting point for negotiations. As many puppy breeders are "hobby" breeders, the buyer should be very careful to ensure that their puppy deposit contract is enforceable, that it contains clear refund terms, and that each party has the requisite obligations under the contract in exchange for the funds given – in some instances, the contract may appear valid but is not legally enforceable having no requirement that the seller deliver a puppy to the buyer. In another instance, a buyer paid for a puppy deposit without receiving an agreement, even after requesting the agreement; the buyer received a puppy, but upon noticing that the agreement was for a larger breed, the buyer demanded a refund based on the contract’s terms. In that instance, the court agreed with the breeder’s argument that it was unreasonable to conclude the buyer would only be receiving a specific, larger puppy and not only receiving the first puppy whose birth did not produce the larger puppy contemplated in the written contract. Discussing these points in advance of receiving a puppy may avoid a dispute over the puppy deposit in the event of a puppy’s actual birth.

How to Compose a Puppy Deposit Contract

The terms of the deposit contract should be reasonably clear. If the breeder says the puppy will be theirs until it is paid off, you shouldn’t have any ambiguity in the contract. If an issue arises after you have paid the deposit and a portion of the puppy payment, you want the contract to reflect that the breeder remains the owner until the puppy is completely paid for. Signs of ambiguity are words and phrases like "subject to change," "approximately," or even "until the balance is paid." Each of these leave a lot of open ground for the breeder or seller to make changes to the agreement. Spell out how an owner can terminate the agreement. For example, "Buyer may terminate this agreement without penalty within twenty-four hours of signing." Spell out how an owner can receive their deposit back. For example, "Seller may terminate this agreement without penalty within seven days of receiving the deposit. Buyer will receive a refund less 10% of the deposit. An additional re-stocking fee of 10% will apply if purchase is transferred to another buyer." Spell out how the purchase can be paid off. For example, "Buyer may pay for the puppy by cashier’s check, wire, or electronic payment to an account designated by Seller. Once funds are deposited into Seller’s bank account, Seller will transfer ownership of puppy to Buyer. Buyer will then be responsible for picking the puppy up at a mutually agreed upon time." Spell out how the puppy will be provided upon full payment. For example, "Seller will schedule pick up or shipping once the balance has been paid. Seller will not be liable for late delivery if the balance is not paid by the agreed upon date." Spell out whether there is a guarantee. For example, "Seller guarantees that the puppy will be free from any genetic defects for 24 months from the date of birth."

Pitfalls to Avoid in Puppy Deposit Contracts

One significant pitfall to avoid when drafting puppy deposit contracts is failure to require an immediate, fully refundable deposit to reserve the puppy in addition to the non-refundable deposit. When taking deposits, a breeder must consider the practical issues such as how long the buyer has to exercise the option to purchase, what remedies are available to the buyer if the breeder cannot produce the puppy under the timeline or terms set out in the contract and whether the obligations of both parties can be terminated or simply under what circumstances the contract can be breached by one party or the other. A contract should also clearly state the conditions under which the deposit is refundable and the different terms and conditions under which it would be non-refundable. What will happen if the buyers decide they no longer want the puppy and under what conditions the deposit can be forfeited . This issue seems to be particularly relevant to many buyers who have small children. Because they have children, often disappointed when a new puppy arrives, the deposit has to be very clear that it is determined at the end of the waiting period, not at the beginning or during. Similarly, if the buyer does not pay the balance of the price of the puppy, up to the time it is delivered to the buyer, the deposit will be forfeited automatically. By contrast, the breeder should include terms that will automatically end the deal if the puppy is sold to someone else or if there is a significant change in health. On a variety of levels, the implications of any breach will be different for the buyer and the breeder. This is the primary reason why both sides should carefully review the terms of the deposit agreement and consult with a lawyer on how to minimize risks. Careful drafting and negotiation will help smooth the path forward with a new puppy.

Best Practices for Breeders and Buyers

When dealing with a puppy deposit contract, both breeders and buyers should consider the following best practices:
Breeder:

  • Do not over-sell your deposit contract. If you are taking a deposit for a certain litter or certain sex or various traits, make sure you clearly communicate those details in the contract. If the buyer wants or expects something different, you do not want to be in the position of having sold something that you don’t have to sell.
  • Avoid taking too many deposits at once. This can make it hard to honor your obligations, if you are ultimately attempting to fulfill obligations to multiple buyers at the same time.
  • Make sure that the deposit is non-refundable, but still provide the buyer with sufficient rights to expectations for the dog.
  • Don’t promise more than you can deliver simply because you have a more anxious buyer.

Buyer:

– Understand the terms of your deposit contract before signing. The breeder should not make promises that you do not see in writing.
– Understand how long the deposit is good for, in particular, if you’re waiting longer than you expected for a puppy.

Case Examples in Puppy Deposit Contracts

The following real-life examples will shed light on the importance of this issue and on the various ways in which it is possible to give yourself some level of security by having a well-drafted, clearly-written, enforceable puppy deposit contract. These are recent real-life examples of clients coming in after the death of their puppy to sue the breeder for the return of the deposit and to recover damages and none of these are made up. So the problem IS THERE. This is critical.
Case Study 1: Dog Bite
A buyer put down a $500.00 non-refundable deposit on a puppy. The bill of sale listed the dog as Lhasa Apso, not Maltese but there was just a check mark on the line indicating that the seller was "breeder." The buyer ended up taking an Lhasa Apso home with the Lasha Apso papers to prove it. The buyer had a son who was an epileptic; the dog bit the son and the son nearly died. The insurance policy actually paid the claim but the family had to sell their house. They sued the breeder of the dog that was advertised as a Maltese, and they sued the breeder of the dog as well because the dog’s bite during an act of aggression was not expected. In this case, they were both bust and the insurance company had to defend and indemnify them.
Case Study 2: Wrong Sex
A buyer put down a $200.00 non-refundable "reservation fee" plus a $750.00 non-refundable puppy deposit. So that was a total of $950.00. The record keeping was marginal. There was a bill of sale. The dog was advertised as living in (State) but ended up being found in another state. The buyer paid for the dog, $2,200.00, in addition to the $950.00 in deposits. The question now is whether she can get her deposit back even though she signed a contract that said the deposits were non-refundable. Now the damages are significantly higher, but she only has recovery against the person who advertises as selling animals. So it’s a difficult claim made more difficult by the non-refundability provision that she signed.
Case Study 3: Feeder Dog
The seller advertises feeding dogs. "We have dogs in training to help better the breed . These dogs will be feeder dogs and will be spayed/neutered when they finish training." There is no definition of what feeder dogs are, so the expectation is that the buyer thinks the dog is going to be used to produce puppies and that a "feeder dog" is an unspayed female. They bought it before 2000 and the buyers had the papers. The breeder said "does it have a good disposition?" The buyer said the dog seemed to be fine. So they took the dog. Within a couple of months the dog suddenly appears to be aggressive. Apparently the people who lived in a complex near them said the dog was not being good and came into the house and started attacking and killing everyone that it came in contact with. Buyer sued seller for breach of the contract, when in fact, you cannot have an action for breach of a contract where performance is impossible. In this case, there was a limitation on the buyer’s abilities to return the dog, and that’s a problem.
Case Study 4: Illness
Buyer took home a puppy at age 11 weeks. Puppy was sick with parvovirus. The owner brought the dog back to the sellers and sellers had the buyer sign an agreement without an attorney’s review. The contract said the buyer would be responsible for 50% of the costs, but it didn’t say which costs. In fact, it didn’t say "vet" anywhere. The parties have settled their issues.
Case Study 5: Stucco
They exchanged the dog and agreed that the exchange was on "consignment" with the same or of equal value, without actually identifying what that is. The party found out the dog had been swapped for another dog; not the same breed, color, type or age. We sued and sent the seller a notice to vacate the premises by certain date. The owner had already transferred the property and then the property manager had a new tenant. There was nobody there other than the party with a claim. Sherriff went in, removed the tenant, a seizure of specific personal property. Tenant lost security deposit even though he wasn’t the one that should have gotten a deposit back, but we got the equal value of the contract against the property. The collateral here is the property.