Sales Contract Basics

equine law contracts estate planning business One of the big issues in equine law concerns buying a horse. Many people buy one on a handshake, trusting the other person at her word. Unfortunately, doing so can lead to both headaches and heartaches. Having a simple sales contract can make the experience a positive one for all parties. You want to make sure that your sales contract contains certain required parts. The best way to have a secure, and legally-binding sales contract is to hire an equine attorney to draft one. This blog explains some of the important parts the attorney will include in that contract.

Sales Contract

A horse sale contract should include the names of the seller and buyer and all the details of the sale. A thorough description of the horse should be included and one or more pictures can even be attached. If the horse is registered, then the contract should state the registry and registration number. Keep in mind that the seller is held to whatever description is included in the sales contract. For example, if the contract says the sale is for a Paint mare, then the seller has made the guaranty that she is selling a Paint mare. If she delivers a sorrel Quarter Horse instead, she is breaching that contract.

boarding barn sales breeding training riding liabilityThe price of the horse as well as any payment terms should also be in the contract. Sometimes a buyer needs to make payments on a horse instead of paying the entire sale price upfront. If the seller agrees to this, the payment terms should be clearly spelled out in the sales contract, including the amounts and the dates by which they should be paid. The seller can even require the payments be made in a certain manner, such as by electronic deposit instead of by check. Terms should be included that address what happens if the buyer fails to make a timely payment or is unable to pay the entire amount within the time frame specified in the contract. If the seller and buyer renegotiate the payment terms, that new agreement should be written up, signed by both parties, and attached to the original contract.

“As Is” Clauses

You may see what is called an “as is” clause in a sales contract. Such a clause means that the buyer accepts the horse in the condition at the time of the sale, and the seller makes no further guaranties about the horse. Even though these situations are common in the horse world, a buyer should still be cautious. If there is a particular issue a buyer is concerned about, for example lameness or a training issues like bucking, then the buyer should make sure that issue is addressed in the contract.

Even though “as is” clauses are legal, a seller may be liable if she engages in fraud. For example, a seller can’t lie about the horse, stating the horse is sound when she knows the horse is lame. If a pre-purchase exam (PPE) is performed the contract should mention it as well as any details, such as who will be performing the PPE. The contract should include any limitations the buyer is accepting. For example, if the vet states that the horse may need hock injections in five years or is not capable of becoming a Grand Prix jumper due to physical limitations, include those restrictions in the sales contract. Doing so can prevent a future lawsuit or aid in defending one by showing that everyone was on the same page with the same expectations about the horse at the time of purchase.

Two Important Sections

contracts estate planning business trademarkThere are two sections in a sales contract that are important to include. One is an explanation of who will pay attorney’s fees if the sale winds up in court for some reason. Litigation is expensive, and you may find that you win a court case but wind up losing financially when you add in what you must pay your attorney for winning the case. You can avoid this possibility by including a section stating that the party who loses at trial will pay attorney’s fees for the party who wins. In addition, you want the contract to set forth what state will have jurisdiction if the matter goes to court. Imagine living in Massachusetts and buying a horse in California. You would not want to go to California to litigate any problems.

While it may cost a bit more, you should have an equine attorney or at least an attorney familiar with contracts draft your sales contract for you. A little bit of foresight can save a lot of time, money, and energy if something goes wrong with the sale. Contact me today if you are buying or selling a horse, and let’s make sure you have a contract in place so the sale can be a pleasant experience for all involved.

This blog post is for educational purposes only.  It does not create an attorney-client relationship.  Seek an attorney’s advice for your specific situation. 

 

 

 

The Hazards of Preprinted Liability Releases

As a horse professional, you try to save money wherever you can. As a former horse trainer and clinician, I understand your concern with the bottom dollar. I also remember all the tales I used to hear from clients about the “cheap” hay they had found. They would always tell me they’d gotten a great deal. When the concern would appear on my face, they would tell me — before I could say a word — that they knew the hay was going to be just great. It never failed that after they got the hay, sometimes right away and sometimes after the passage of time, the person would complain that the hay wasn’t as good as they thought it was or even had serious mold in it. The person invariably had to either buy new hay or supplement the hay with grain, and they never got any kind of refund. I guess the take-away is that you get what you pay for.

You Get What You Pay For

The same is true with the legal documents that you use in your horse business. I know it is sorely tempting to get inexpensive legal documents off the Internet for your horse business, but doing so could literally cost you that business in the end. Let’s take one of the most popular documents for any horse business, the liability release. Where did you get your current liability release? Did you make it up on your own? Did you buy a preprinted form online from an online legal website? Did you download one from another facility that had one online? If you did any of these things, your liability release may not be worth the paper it’s printed on. And that means it isn’t providing you any protection from a lawsuit.

State Liability Laws

As you probably already know, many laws concerning liability are controlled by state rather than federal statutes. That means that something that is legal in one state may not be legal in another. The problem with downloading a preprinted liability release form from a website, even if it is supposedly written by an attorney, is that the form you download may not be valid in your state. For example, under Massachusetts law, a very specifically-worded warning must appear in your release. That language isn’t included in a preprinted liability release that anyone from any state can download. And yes, I am telling you that I have looked at the forms commonly available for download online, and the required language is not there. I have even found a liability release for download online used by a very popular clinician that is not valid in Massachusetts because it does not contain the required statutory language. What this means for your equine business is that this kind of form is not legally binding here in Massachusetts if someone sues you for injuries and you have to go to court. You may think you are protected but you aren’t.

Changing State Laws

Another problem with online legal forms you can download is that state laws change. An attorney focuses on the law of her own jurisdiction. She doesn’t have the time to constantly look for changes in the laws of all 49 other states so she can update her online release form to make sure it’s valid outside the state where she practices. Doing so may even run afoul of the law concerning the unauthorized practice of law in a jurisdiction where she is not licensed to practice. You leave yourself open to liability if you rely on a release drafted by an attorney who is not licensed to practice law in your state and whose business is keeping abreast of all the changes and updating forms accordingly.

Completed Incorrectly

You can even have problems if the forms themselves are valid simply because you don’t know how to fill it out properly. I know of a case where a barn that downloaded a liability release from the Internet and got sued wound up in big trouble. The release they used did them no good because they had neglected to put their barn’s name in the spaces left blank for that purpose. They simply didn’t know how to fill out the form properly and never had a local attorney check it over. In the end, they lost a lot because of trying to save money in the wrong place.

As an attorney, I am trained to pay attention to details. While this can be frustrating for some life activities – making sure every piece of leather is tucked into its keeper even though I’m just going on a short ride and no one will see me or my horse, for instance – it is essential when doing legal work. I know what language legally has to be there for your liability release to hold up in court. As a Massachusetts attorney, it’s my job to pay attention to the ways Massachusetts law may change and how that change impacts you and the liability release you use. And as an equine attorney, I know what things might be important in a liability release for your specific business that might not be important for someone else’s. Think of it this way: a liability release is meant to protect you from being sued successfully. If it can’t do that because it doesn’t meet Massachusetts state law or isn’t filled out properly, then what’s the point of having it? It’s just a worthless piece of paper.

So, while you may cringe at having to pay an attorney to have your documents drafted, it’s well worth doing so. I love bling bridles and other fun things we buy for ourselves and our horses. But putting off getting that bling bridle for a month or two can provide you with the right documents to protect you and your business.

Contact me today to learn how I can help you make sure you have a valid Massachusetts liability release.

This blog post is for educational purposes only.  It does not create an attorney-client relationship.  Seek an attorney’s advice for your specific situation. 

UK Decision Showcases Liability Dangers

As horse owners, we enjoy sharing our love of horses, and we sometimes even let our friends ride our horse. What happens if a person is injured while riding your horse on your property? Many factors influence whether you will be held liable for those injuries. A case from England highlights some of the important points to keep in mind. While British law is different from the law we practice here, the case raises some important points to keep in mind.

Tragic Accident

Ashleigh Harris was 14 years old when she went on a picnic with her boyfriend and his family at their family farm. She had been riding for about a year on her own pony at a local stable. She had never ridden a horse. Her boyfriend’s mother, Rachel Miller, who was new to riding, had recently bought an ex-racehorse. They visited the horse on the picnic, and Ashleigh wound up riding the horse. She trotted the horse in an open field, and the horse began to canter. Ashleigh lost control and fell over the horse’s head. Ashleigh suffered a spinal cord injury and is now paralyzed from the waist down. She sued for compensation for the lifelong medical care she now requires. Miller rejected a settlement offer for the maximum amount under Miller’s “personal liability” coverage, so the case proceeded to trial.

Court Decision

A judge at the High Court in London ruled in Harris’ favor and awarded her more than 3.5 million dollars. In his decision, the judge found that Miller had encouraged Harris to ride the “strong and willful Thoroughbred.” The judge stated that Miller had limited knowledge of Harris’ riding ability but knew she had done more riding than Miller. He said that Miller had made a “serious error of judgment” in buying such a horse because Miller was so inexperienced and that she should have known such a horse would be difficult to ride, even for a competent novice rider. The judge ruled that Miller was an unreliable witness with an implausible explanation for what happened that day. The judge went on to find that Miller exposed Harris to a risk of injury by encouraging her to ride the horse and either condoning or instructing her to trot the horse in an open field for the first time. The judge said it was reasonably foreseeable that the horse would be difficult to control and, in certain conditions, might throw a rider who wasn’t used to riding a horse bred to race and trained to gallop. Miller was only insured for a limited amount, and that amount was not enough to cover the judge’s ruling.

Insurance

An important factor in this case concerned insurance. It appears from the decision that Miller relied on her homeowner’s insurance and did not have specific equine insurance. Your homeowner’s policy may cover some equine-related activities on your property, but questions can arise concerning what kinds of activity and what level of financial coverage is provided. If you intend to have people engage with horses on your property, you should consult an equine insurance agent and discuss your needs.

Liability Statute

You may be thinking that you would be covered if this accident happened on your property because your state has an equine liability statute. Not necessarily. Many of the statutes only apply to equine professionals, which means you may not be covered if you have a horse for fun and that horse injures your friend. In addition, many of the statutes have exceptions to the law. For example, the Massachusetts equine liability statute includes an exception if the horse professional fails to make “reasonable and prudent” efforts to determine if the participant can safely participate in the equine activity. It also states that the equine professional must determine that the participant has the ability to handle the particular equine. Those are factors the UK judge mentioned when he found that Miller should not have encouraged Harris to ride the unruly horse and to trot in an open field.

Liability Release

You may wonder if liability can be avoided or limited if the person riding your horse signs a liability release. It depends on the facts of the specific situation. Generally speaking, a release won’t relieve you of liability if you are negligent in letting someone with little to no experience ride a horse that is not suited for that person. Even a horse professional may still be held liable in that scenario. Many factors come into play such as whether you knew about the person’s level of experience, whether the person was honest about their level of experience, and how much you knew about the horse and the level of rider it required.

Many people simply take care of these potential liability issues by not letting anyone else ride their horse. Your friends will invariably say that they won’t sue you if anything happens. Let your friends know that you aren’t worried about that, but that insurance companies are becoming more active in suing to recover expenses. So if an injury occurs, you may have to deal with a lawsuit from the insurance company concerning your friend’s medical expenses. If your friends insist – and it’s hard to resist sharing our love of our equine partners – you can explore other options, such as finding a local barn where you can ride together.

If you really want to let you friends ride your own horse then get liability insurance that is suited to your specific equine situation. Don’t assume your homeowner’s insurance will protect you. Talk to an equine insurance agent, not just your homeowner’s insurance agent, to get the best protection tailored to your situation. While no insurance can bar a lawsuit from being filed, it can protect you by paying any claim and lawyer’s fees instead of you having to pay out of pocket. This type of insurance is often called Private Horseowner’s Liability Insurance. If you get this kind of insurance, you know you are covered, and you can have fun with your friends and your horses. In addition, consult an equine attorney to discuss the possibility of a liability release and what questions you should ask, as well as steps you should take, to protect yourself.

This blog post is for educational purposes only.  It does not create an attorney-client relationship.  Seek an attorney’s advice for your specific situation. 

 

Midlife Horse Buyers

An article in the Wall Street Journal entitled “Midlife Crisis?  Maybe a Horse Will Help,” reported that women in their midlife years are returning to horses and horseback riding. Such a phenomenon is no surprise to horsewomen. But having this issue addressed in a well-respected, nationally-read newspaper raises our personal awareness of this issue to one of national interest. A lot of horse people, especially women, feel like people who aren’t involved with horses think their riding is not an important part of their lives. But this article, by virtue of being in the WSJ, shows it’s something that shouldn’t be dismissed. It pointed out that more than 75% of horse owners are women. We all know that at any given barn, way more than three-fourths of the people spending their time there are women, many of them riding horses they don’t personally own.

When I was a trainer and clinician, “mid-life” women riders were the group I especially focused on and worked with in lessons and clinics. Women in this demographic group just want to ride, and many of them either don’t want to compete or they want competition that’s centered more on fun than placings. Many of the women I worked with primarily wanted to explore the relationship they could have with the horse they rode. They valued the fact that being with their horse gave them time away from work and family obligations. And sometimes they wanted to find other “older” riders to explore the special life experiences and camaraderie that this group shares.

Concerned with Safety

The biggest concern women in this group of riders had was safety. Many of them remarked that they were fearless when younger, but now they were more focused on riding in a discipline that was safer – for instance, dressage rather than jumping — and having a horse they could trust. They didn’t want the young, green broke horse or the troublesome horse they might have ridden when they were younger. They wanted a safe horse they could really build relationship with and feel safe riding. Far too often, I saw women buying horses they’d been told were safe, but the horses wound up being difficult, even to the point of injuring some of those women.

Safety Steps

There are several steps you can take to make it more likely that the horse you buy will be the safe and trustworthy horse you want. First, consider where you are buying the horse. There are a lot of great people out there selling horses, but, just like in every other aspect of life, there are also people who just want to make money. Other people who need to get rid of a difficult horse they can’t afford to keep will resort to bending the truth, lying, or simply not disclosing issues in order to do so.

One way to protect yourself is to ask a thorough list of questions instead of just relying on the information someone gives you about the horse. Doing so allows you to get information crucial to you, sometimes information that even an honest seller may not think is important. Some of those questions include: Has the horse ever bucked? If so, why and when? Has the horse ever bolted? What circumstances surrounded that incident and did it happen more than once? After all, a seller younger than 30 who’s been riding the horse in question may not think it’s a big deal if the horse has bolted – but that might matter very much to you.

Even if you ask all the right questions, another important way to protect yourself is to have a written purchase and sales contract, which I will explain more in future blogs. A well-written and understood contract may be the difference between you having a horse you can enjoy and one that injures you.  Without a good purchase and sales contract, you may even find yourself with an unrideable horse you have to pay a lot of money to maintain — to the point that you can’t afford to buy a second horse you can ride.

An important thing to remember is that the cost to purchase the horse is just a small amount of what a horse costs.  There are recurring fees that include feed, boarding, vet, and farrier, and even lesson or training costs. Asking the right questions means exposing needs that may lead to fees you never anticipated. Does the horse need special feed? What about special farrier needs? Getting as much information as possible before you purchase the horse – and documenting that information in a contract – can protect you from unwanted expenses later.

Want a list of questions to take with you when you look at a potential new horse? I’ll be posting some of the most important ones to ask – not just for the sake of safety but also peace of mind and finding just the right fit – in a future post.

This blog post is for educational purposes only.  It does not create an attorney-client relationship.  Seek an attorney’s advice for your specific situation. 

The horse industry is big business

Graphic courtesy of the University of Minnesota Equine Extension Program. Used with Permission and Credited.
You may have heard the joke about “How do you make a small fortune with a horse business?”  Answer: You start with a large one! For years now, I have heard people say you can’t make a living working with horses. When we say something repeatedly, we tend to start to believe it. But what if the story of not being able to make a living with horses is actually false? What if you can make a living?

Recently, the University of Minnesota Equine Extension Program shared the graphic to the left on its Facebook page. Contrary to what you may have heard, the horse industry is booming. And it’s doing so because of equine business owners. Think of how many businesses it takes to maintain horses. A short list includes vets, farriers, feed stores, hay producers, tack stores, equine dentists, equine chiropractors, equine massage therapists, horse trainers, riding instructors, clinicians, horse breeders, horse associations, and horse rescuers.

One of the keys to being successful as an equine entrepreneur is to realize that while you love working in the horse world, it is a business. That means it has to be run as one. You have to start with a business plan and the correct business formation. You need legal contracts drafted by an equine attorney. You need to protect your company with a trademark. You need a marketing plan. You may need liability insurance. You may need documents specific to your equine business, such as barn rules. If you have all of these things in place as you start your business, it is easier to assess where and how you need to make changes if something isn’t working right or if you want to expand your business.

If you feel passionate about horses, contact me so we can discuss how I can help you start, build, or rebrand your equine business with my equine legal and business consulting services.

This blog post is for educational purposes only.  It does not create an attorney-client relationship.  Seek an attorney’s advice for your specific situation. 

A Safe Home for Your Horse

equine estate planning liability releases equine contracts equine businessHow do you find a home for a horse that you are retiring if you can’t keep that horse with you? It’s a situation that can turn bad quickly as evidenced by a recent news story.  A tragic story coming out of Georgia concerns horses and the possibility they were sent to slaughter instead of having comfortable retirement homes. A jury indicted Fallon Blackwood, a third-year veterinary student at Tuskegee College of Veterinary Medicine, in October of 2018, with “13 counts of bringing into the state property obtained by false pretense elsewhere.” The Blount County, Alabama sheriff’s office arrested her this past weekend at a rodeo. The allegations against her arise from complaints filed by individuals who gave Ms. Blackwood their horses based on her promise that they would live their lives on a farm Ms. Blackwood owns. Ms. Blackwood, however, could not tell the former owners where the horses were when they inquired about them, and according to District Attorney Pamela Casey, the horses are believed to be dead. Because the DA did not want to discuss facts of the case, she would not go so far as to say whether she believed Ms. Blackwood sent them to Mexico for slaughter. The former owners believe that is exactly what happened. Ms. Blackwood posted bail while the case is pending trial, and according to students at Tuskegee, was back on campus for classes leading to her graduation in May.

The allegations, if proven true at trial, are a horrible example of what can happen to a horse that is given away without any legal protections put into place. The best way to protect your horse is to provide her with a lifelong home. Realistically, that is not always possible. Here are five things you can do if you are in the situation of giving your horse away to someone:

  1. Use a contract, not a handshake. I know that in the horse world, we like to think that everyone loves horses and is honest with us about them. But the horse world is comprised of imperfect humans, just like the rest of society. A contract drafted by an equine attorney sets out the expectations of both parties and protects them if something goes wrong. It also protects the horse because you can make sure your horse is getting the care you expect.
  2. Get updates. You should make sure that you get constant updates from the person who is giving your horse a home. These updates should be included in the contract, and you must make sure you enforce them. Details such as how often you get the updates, how you get them (for example, pictures sent via email, or updates posted to a Facebook page), and what happens if you don’t receive the updates should all be stated in your contract.
  3. Don’t accept excuses. I know that most of the people reading this article are women because we make up the majority of the horse world. We are told to be nice, not offend others, and certainly not think the worse of someone. But if you aren’t getting the updates stated in your contract, don’t accept excuses. Go and see your horse or contact someone you know in the area to go see the horse. Again, this is another detail to put into your contract. Any horse person will understand that you want these protections because we have all read the horror stories like the one concerning the allegations against Ms. Blackwood.
  4. Visit the facility and get references – and check them out! You can make sure that the person is representing herself honestly by going to see the facility and getting references. Ideally, you want to see the facility at a time when you are not expected. Doing so is not a problem with a public facility because you can simply show up. Private property is a bit trickier because you obviously can’t trespass on private property. In that case, you may need to drive by at an unexpected time, depending on how much of the facility is visible from a public road. This situation leads to the importance of getting references and then following through and contacting them. Don’t just get friends. Get a list of other people who have horses there or have had them there in the past. Get the vet, farrier, and other equine-service provider to provide you with references. With the Internet at your fingertips, do a Google search and look at social media pages. While it’s true that anyone can leave a bad review, and sometimes people malign others because they simply don’t like them, doing a thorough search and speaking to people may lead you to more information that allows you to feel comfortable about the person or raises red flags.
  5. Go with your gut. We have all heard stories of someone saying, “Well, I had a bad feeling about it, but I didn’t listen to my gut, and I should have.” If you are discussing the possibility of your horse going to someone, and it just doesn’t feel right, then don’t do it. You can find another situation for your horse. Some people tell me that they don’t want to offend someone by turning them down. All you need to do is say that the situation isn’t right for your horse. You don’t owe them a further explanation. Think of your horse first.

I will update my blog when the case concerning Ms. Blackwood is decided. In the meantime, please feel free to contact me if you want to talk more about how you can protect your horse when you look for her retirement home.

This blog post is for educational purposes only.  It does not create an attorney-client relationship.  Seek an attorney’s advice for your specific situation.