In these tough economic times, many stallion owners are finding it harder than ever to make a profit. Fewer people are breeding their mares. Fewer people are buying horses. Yet, the cost of maintaining and campaigning stallions remains higher than ever.
Some stallion owners think they should stop using written contracts in an effort to make business less complicated and more inviting to mare owners. Simplicity, they think, creates a competitive edge that will attract more business and reduce operating costs. Think again. Well-written contracts can save money and avoid costly legal battles. And in a down economy, that makes good business sense.
This article discusses the benefits of written breeding contracts.
How Contracts Can Help Prevent Disputes
Traditionally, people arranged horse breedings on a handshake with nothing in writing. Since then, the horse breeding process has become far more complicated. And so has the business. When problems arise, even successful equine businesses are not equipped to pay huge legal fees. Breeding contracts, as illustrated below, can effectively avoid disputes when they foresee and address possible problems.
Common Problems Breeding Contracts Can Avoid
Dispute #1 –
The mare fails to deliver a live foal
Breeding contracts can plan for this in several ways. For example:
- The contract can clearly define what “live foal guarantee” means. For example, if a “live foal” means a single foal that can stand and nurse unassisted within 24 hours of birth, this would prevent a free re-breed request if a mare delivered twin foals but one was healthy and the other died soon after birth.
- It can explain fees and charges that mare owners must pay when seeking re-breed privileges through the live foal guarantee, such as the stallion owner’s most recent booking fees and deposits (even if they are higher than last year’s fees).
- It can explain what mare owners must do before they are entitled to claim re-breed privileges such as submit a prompt veterinary certification of no live foal and the circumstances of the lost foal.
- It can also specify what actions on part of the mare owner will void the live foal guarantee.
Dispute #2 –
Mare owners demand semen shipments more frequently than the stallion manager can send
In transactions involving shipped semen, disputes occasionally arise when mare owners expect semen shipments more frequently than the stallion manager is prepared to fulfill. Contracts can avoid this problem. In contracts involving shipped cooled semen, for example:
- The contract can specify what days of the week, and even what hours of the day, the stallion manager is available to receive and process requests for shipped semen.
- It can explain what months of the year the stallion is available and can be collected.
Dispute #3 –
The stallion manager imposes charges
In horse breeding transactions, stallion managers often impose extra fees and charges such as semen collection fees, shipping fees, shipping container deposits, and late payment fees. The parties have every incentive to list these charges in the contract and to explain when, and if, mare owners can receive a refund.
Dispute #4 – A dispute arises and legal action is threatened by either party
Even the best written contracts cannot prevent all possible disputes. But a well-written breeding contract brings the best chance of avoiding disputes. Also, the contract can plan for this possibility and accomplish several things, such as:
• It can include an attorney fee clause through which one party must pay the other party’s legal fees.
• It can explain what state law applies to the transaction and where legal disputes must be brought.
• It can allow for disputes to be submitted to an alternative to the traditional legal system, such as mediation or arbitration.
Conclusion
Well-written contracts can help avoid disputes and spare all parties money and aggravation. Standardized, one-size-fits-all form contracts are, at best, a starting point from which to develop a good customized contract. Do not be afraid to enlist a lawyer to help – the cost to draft a good contract is a mere fraction of the cost to litigate in court an equine contract dispute.
This article does not constitute legal advice. When questions arise based on specific situations, direct them to a knowledgeable attorney.
About the Author
A lawyer for over 23 years, Julie Fershtman is one of the nation’s most experienced Equine Law practitioners, has successfully tried equine cases before juries in four states, has drafted hundreds of equine industry contracts, and is a Fellow of the American College of Equine Attorneys. For more information, visit www.equinelaw.net or www.equinelaw.info.
Julie Fershtman’s books, MORE Equine Law & Horse Sense and Equine Law & Horse Sense, help people avoid disputes. Order both for $42.90, first class shipping included. To order, call Horses & The Law Publishing at 866-5-EQUINE. Or, send check or money order to Horses & The Law Publishing, P.O. Box 250696, Franklin, MI 48025-0696.
Attention Lawyers and Paralegals: This year the American Bar Association published Julie’s new book on Litigating Animal Law Disputes. The book covers a wide variety of legal issues involving horses and other animals and includes sample court filings. Horses & The Law Publishing sells the book for a large discount off the ABA’s $130 cover price. Contact Ms. Fershtman directly for information.
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