
I think that's awfully cruel as the breeder has incurred all of the costs and all of the responsibility. My stud contract clearly states that two puppies or less do not constitute a litter and therefore there will be no stud fee - but then they would not get a free return as they would have done if the bitch hadn't taken at all.
When reared well and if including all costs - especially the cost of an unexpected c section the first 2 puppies in the litter barely cover the costs to the breeder.
I have begrudgingly agreed to a pick of litter and it all went wrong. The breeder refused to relinquish the pup after half of the litter was lost (8 puppies in litter, 2 born sleeping, 1 didn't make it and 1 (last one) the bitch tore apart due to poor, poor care during whelping) and also refused to pay the price of the pup either. Ended up in small claims court where we won but even then they never paid as they absconded. The court doesn't not enforce the judgement - just gives a ruling. Never again!
Better off being clear from the start and pay the stud fee. As a stud dog owner, I have never demanded 1st pick of the litter and have preferred an outright payment. I have heard of stud owners who demand payment AND 1st pick. I have also known of a stud owner demanding 1st and 2nd pick of the litter....As a breeder, this is something I would never, ever agree to and would always steer clear of anyone only wanting a pup instead of or as well as payment.