5 reasons horse contracts fail

As an attorney and a lifelong equestrian, I’ve seen many horse-related contracts that aren’t worth the paper they are written on. Here’s how to make sure you are legally protected in your horse-related activities.

The woman’s voice on the other end of the line was calm and measured but I could tell this was a difficult discussion for her to have. She had left me a voicemail, stating that her beloved horse was now lame after being leased to someone for only a week. A potentially career-ending injury had occurred during that time. The veterinary bills were piling up, and her horse was now on stall rest for an indefinite period. The owner had never received any money from the person leasing the horse and she wanted to know her legal recourse. After she provided some details, I asked her if she had a contract. She hesitated, finally admitting that she did but that the person leasing the horse hadn’t signed it yet.

I wish I could say that the woman’s situation surprised me but it didn’t. As a lifelong equestrian, I am well acquainted with horsepeople thinking that deals can be made with a hand-shake and that every horseperson can be trusted to be honest and true to her word. As an equine attorney, I’ve seen too many times when that is not the case. I know that a contract can prevent headaches and heartaches. I also know that the contract has to be drafted and executed properly or it’s not worth the paper it is written on.

Horse people often think deals can be sealed with handshake alone. But a handshake offers minimal, if any, legal protection.

Horsepeople sometimes ask me why they can’t just write up an agreement themselves. After all, the elements of a contract seem simple: You are establishing an agreement between two or more people or companies to do something or not do something. A contract will include “offer,” such as the sale of a horse, and “acceptance,” such as the purchase of that horse.

But there’s much more to writing a legally binding agreement. A contract is legally enforceable because it contains certain elements required by state law. Which law controls the situation can be easy to determine if both parties live in the same state, and the transaction takes place in that state. It can get more complicated if multiple states are involved, and the level of complexity can really increase if the contract involves different countries.

Then there’s the question of specifics: All parties to the contract must agree to the specifics of the contract. This element is called the “meeting of the minds,” and it can be a very important issue if the contract is challenged at some point. For example, you might allow someone leasing your horse to jump, but your idea of jumping and that person’s may be very different—you might be picturing cavalettis in an arena while they plan to ride a cross-country course. The contract must also include “consideration,” which means that something of value is being exchanged for the good or service. It doesn’t have to be money but it often is.

I know that when you have horses there are many other things you’d rather spend money on, but don’t scrimp on ensuring that you have legal protection. A contract has to include certain elements to be legally enforceable and it almost always requires a legal professional to determine if those standards are met. You’ve probably heard of people taking care of legal matters on their own—and perhaps you’ve even done the same, using a basic template—without problems. But you’re taking a risk each time, and your luck can run out. When these situations go bad, they can do so quickly, with dire consequences. No one wants to write up something, thinking it provides legal protection, only to find out during a crisis that you can’t enforce what you wrote.

Common reasons contracts fall short

One of the biggest issues I see these days is the popularity of downloading contracts found on the Internet without any input from an attorney. I have horses so I understand that most horsepeople are trying to save money wherever they can. But the adage “You get what you pay for” is worth keeping in mind in these situations. We all know the people who get excited about finding a supply of inexpensive hay. Many times, though, you hear later that the hay was of poor quality or wasn’t delivered as promised so the purchaser either had to buy new hay or pay for supplemental rations. And, of course, they never get any kind of refund.

Other situations can be even worse if a person doesn’t have the protection of a legal contract. For example, if you rely on free legal documents from the Internet for your horse business, a dispute could literally cost you that business in the end. A good example is 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? Buy a preprinted form online from an online legal website? Copy your agreement from one that another facility had online? If you did any of these things, your liability release may not provide any protection from a lawsuit.

Working as an attorney over the years, I’ve seen many deals and agreements go bad. The best protection an average person has in these situations is a valid contract. Not all contracts are equal, however. To be valid, a document must meet specific requirements. Here are the deficiencies that most often invalidate contracts in the horse world:

1. One of the signers is not competent or of age. A person entering into a contract must be competent and have the authority to do so. This requirement means the person needs to be the age the state stipulates to enter into contracts. That’s why if your child rides at a barn you—rather than your son or daughter—are asked to sign the liability form. In addition, the person signing the agreement must not be under the influence of alcohol or drugs.

2. One of the signers does not have the authority to enter the agreement. If the person is entering into a contract on behalf of a company or as a representative, he or she must have the authority to do so. For example, if you sell hay to a boarding barn, make sure the person signing the hay contract has the authority to sign on the barn’s behalf. If that person doesn’t have the authority from the barn owner to sign contracts for the barn, then you may not be able to sue for payment if the barn fails to pay you for the hay.

3. The contract doesn’t comply with state law. Laws concerning contractual issues, such as liability, are controlled by state rather than federal statutes. That means that something that is legal in one state may not be in another. The problem with downloading an equine contract from a website, even if it is written by an attorney, is that the form you download may not be valid in your state.

For example, I have looked at the liability forms commonly available for download online, and the required language for the contract to be valid in Massachusetts is not there. I have even found a downloadable liability release used by a very popular clinician that is not valid in Massachusetts because it does not contain the required statutory language. Without that language, this kind of form is not legally binding in your state if someone sues you for injuries and you have to go to court. That means you may think you are protected but you aren’t.

Click here to learn the 8 rules all horse buyers should follow. 

4. The contract was completed incorrectly. Even if a contract is valid in your jurisdiction, you can still have problems if you don’t fill it out properly. I know of a case where a barn that downloaded a liability release and got sued wound up in big trouble. The release they used did them no good because they had neglected to put the 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 review it. In the end, they lost a lot because they tried to save money in the wrong place.

5. The contract contains provisions that are outdated. Another potential problem with online legal forms is that state laws change. Attorneys tend to focus on the law of their own jurisdictions; they don’t have the time to constantly look for changes in the laws of all 49 other states to update online release forms to ensure validity outside their states. Doing that may even run afoul of the law concerning the unauthorized practice of law in a jurisdiction where they are not licensed to practice. You leave your-self 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.

While you may cringe at having to pay an attorney to have your documents drafted or reviewed, it’s well worth doing so. Putting off getting that bling bridle you want for a month or two so you can save money to pay an equine attorney can provide you with the right documents to protect you, your horse and/or your horse business. 

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

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