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.

Sales Contract Basics

equine law contracts estate planning business With spring finally sprung and show season either in full swing or happening soon, now is a popular time to buy 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.

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, include any 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 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.

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 is performed, make sure to mention that in the contract. Also 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.

contracts estate planning business trademarkThere are two sections in a sales contract that you might not have thought of including. 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. And at this time of year, it can help make sure that a special dream-come-true horse doesn’t turn out to be a nightmare.