If you have found the puppy of your dreams....parents with perfect health tests, and temperament, and the pedigree that you want for show/work or whatever....then perhaps the breeder not knowing the law about microchips you could get round. I would worry that, really, you have found yourself with someone that is not all that professional. I say this because I personally do not think that going with someone breeding a random pet is better than going with someone who is professional and knows what they are doing breeding dogs, and has a good knowledge of genetics, and health considerations etc. So that is my own personal bias, and of course the choice is yours...
Just FYI, it is also illegal for the breeder to register the puppy's microchip to you, too. It must be registered to them, as the first keeper. It's then up to you to have it changed to your details when you buy the puppy.
I'm assuming that's in the UK? As far as I can tell, in our state (Victoria) in Australia, the puppies must be microchipped when sold but I can't see the same, or similar wording as in the UK rules.
Haha, I expect a full run down of the laws in every country by tomorrow . Oh, and we have different laws in each of the different states and territories so there's a bit of reading to be done in Australia alone
Cos I know you're all dying to hear about the NZ law...no idea, it must vary between councils My council requires dogs to be registered and chipped by 3 months of age, no burden on the breeder/seller to chip them.