Equine Law: Lease and Sales Agreements 101
Equine Law Practice Tips: Get it On Paper
One of the most important pieces of advice I can give a client who is horse shopping is to be as proactive as possible. Paper your contracts, hash-out the nuts and bolts prior to transferring the horse. Things in the industry are changing, do not be caught one-step behind because you took something on faith that could’ve been avoided if you had expended the resources up front to negotiate and execute a contract.
First and foremost you always want to ensure your contract lists the proper parties. It may seem obvious but a lot of litigation occurs around who the valid owner of a horse is an naming a buyer and seller in a sales agreement goes a long way to protect clients from potential litigation. If one of the parties is an entity instead of an individual, make sure the entity is listed and the person you are contracting with is a proper agent and signatory of the entity.
Next, make sure you document the horse in the terms by spelling out the registration number, breed information, USEF number, and any other identifying information you may have of the horse you are purchasing/selling/leasing out. It is imperative that this information matches insurance, breed registries, and competition associations to avoid claims of fraud or misfeasance.
Also, make sure the payment terms are clear; where is the money being wired, how much is due and when is the horse expected to be transported? Does ownership transfer as soon as the horse steps on the trailer and off the seller’s property or not until he has safely arrived at his new home? If it is a lease agreement include a clause about when payments are due each month and penalties for late payments or missed payments. Include termination provisions and cancellation procedures to get the horse back should things not work out.
Another important key to a contract is to discuss permissible uses and activities the horse will be expected to perform. There are countless instances where terms of lease agreements are left ambiguous only to haunt the contracting parties later when a horse goes lame and the rider is left without recourse.
Other important provisions include designating the state law that will govern the contract and the parties’ rights, that the contracting parties are subject to a specific jurisdiction in the event of a dispute, lawsuit or arbitration and a default clause that includes an interest rate or late fee penalty for late or non-payment on the contract.
In sum, a complete and accurate fully executed agreement can save a lot of heartache and finances later should something happen to trigger a breach of contract. Remember, a boilerplate contract will not adequately address unique circumstances or situations. Contact an equine law attorney for a free consultation if you are in the market for a new horse or looking to lease a horse to assist in memorializing the terms of your agreement and set forth the rights and obligations of contracting parties.