BY JULIE I. FERSHTMAN, ATTORNEY AT LAW
Equine-related leases have been increasingly popular, especially for show horses and breeding stock. Disputes sometimes occur involving these arrangements, and lawsuits can follow. With advance planning, equine lease agreements can help avoid some disputes from happening. This article offers a few examples.
To begin, lease agreements involve terms that can be unfamiliar. The “lessor” in a lease is the one who owns the horse at issue and has the ability to temporarily transfer possession, custody and/or use to another. The other person in the lease transaction who receives use of the horse under the terms of the agreement is the “lessee.”
EQUINE LEASE FINE POINTS
Issue: Duration of the Lease
When a lease agreement fails to address or even describe its duration, problems can occur. Certainly, with some leases the parties want flexibility, and they structure the arrangement in an open-ended way to allow either party to terminate it with, for example, one or two month’s advance notice to the other. With other leases, timing is important. If a lessee wants to prevent a lessor from calling off the lease at an inconvenient time, such as when the lessee plans to show the horse or keep a mare through a foaling-out and weaning period, the lease agreement can specify the duration. The agreement can, for example, identify how long the lease will last, when it can be terminated, how it can be terminated, and whether (and how) either party can end it sooner or extend it.
Issue: Lessor Disapproves of Lessee’s Use or Care
Sometimes lessors and lessees disagree about the quality of the leased horse’s care and use. This happens if, for example, the lessor disapproves of the lessee’s trainer or boarding stable or the events in which the leased horse is competing. In extreme cases, the lessor might suspect that the lessee has abused the horse. If restrictions are important, the parties can include them in the agreement by, for example:
• Restricting the allowable height for jumping activities, whether showing or schooling.
• Specifying where the horse can be stabled as well as trainers who are permitted to ride, drive, handle, or work with the horse during the lease.
• Giving the lessor discretion to terminate the lease if he or she believes the horse has received improper care and attention.