Contract Checkup

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Automobiles need regular maintenance to avoid the dreaded CHECK ENGINE light, annual physicals can reveal potentially serious medical conditions, and adherence to a schedule of vaccinations and regular visits from the farrier help keep our horses healthy and sound. A boarding farm or stable also requires periodic maintenance to thrive, and one of the best places to start is with your boarding contract.

If you’re not using a written contract and instead rely on oral agreements with your boarders, the question is not whether you will have problems, the question is when.

Oral contracts can be as effective as those in writing, under the right circumstances, but they invite disagreements, hard feelings and occasional lawsuits. There is no time like the present to shift from oral agreements and handshakes to written boarding contracts.

If you’re already using written boarding contracts in your business: Congratulations! But beware. Last year’s contract might not accurately reflect this year’s boarding operation. Fees and services provided can change, for example, and your contract should be updated accordingly. If your contract is a generic, fill-in-the-blanks contract downloaded from the Internet or copied from a book, it probably will not accomplish what you want it to do—protect your business—or satisfy the law in your state.

There won’t be a blinking warning light to alert you to problems with your boarding contract, so pick a time each year to review the agreement and make the changes necessary to have the document mesh with your business plan. Some suggestions about contract language follow, with an important caveat: These suggestions are starting points only. They are not legal advice and should not be incorporated into your contracts without consultation with your attorney.

General Provisions

  • All contracts should include:
  • Identification of the parties signing the agreement
  • Complete contact information
  • The starting date and the term of the agreement (an annual review of your boarding contract will require new signatures if changes to the document are made)
  • A provision for recovery of attorney fees if a lawsuit must be filed to enforce the agreement
  • An agreement that the written contract can only be amended in writing
  • A statement identifying which state’s law will apply, and
  • Space for signatures.

Preparing two identical contracts with complete signatures allows each party, both the boarding farm owner and the horse owner, to have signed originals.

An important consideration is whether the horse owner can legally sign the contract. A minor (someone under the age of 18 in most states) lacks the legal capacity to enter into a binding contract. You might have little legal recourse if a minor boarder decides not to honor the contract and refuses to pay the board bill. Requiring a parent or legal guardian to sign the contract and assume responsibility for the bill helps protect the stable owner.

Identify the Horse

It’s essential to identify the horse being boarded, as well as the animal’s physical condition upon arrival at the stable. The identification should go beyond “chestnut with star, white right hind” and include color, markings, sex, age, registration tattoos or brands, scars, whorls, chestnuts and any other distinctive physical characteristics. If the horse has been microchipped, that information and the ID number should be included. A set of photographs—front, rear, and two side views—also can be attached to the contract to help avoid misidentification.

The horse’s physical condition, including any previous surgeries or injuries, should be noted to avoid subsequent allegations that an injury was suffered while the horse was in the stable’s care. The accuracy of any information provided in advance by the horse owner should be verified when the horse arrives at the stable, before the farm owner assumes responsibility for the animal.

Rates and Services

The contract should specify all the services the farm provides, such as pasture board or stall and turnout, grooming and exercise, foaling, transportation to events, braiding, and so on, as well as any special requests desired by the horse owner. The contract also should specify the standard of care the farm will provide. Such language might include a standard of care “commensurate with accepted industry standards common to the region in which the boarding stable is located.”

In addition to the charges for board and other services provided by the stable, the contract also should require the horse owner to pay all third-party expenses incurred by the farm in the proper care and maintenance of the horse. These charges could include expenses for veterinary care, farrier services, transportation and so on. (Best practice would be for the service provider to bill the horse owner directly, removing the boarding farm owner from the billing loop, but third parties generally will be reluctant to do so.)

In an emergency, the farm owner should have the authority to call a veterinarian at the horse owner’s expense, if reasonable attempts to contact the owner fail. The contract also should specify whether the farm allows boarders to make their own arrangements for veterinary and farrier care or are expected to utilize the farm’s providers.

If the farm plans to allow boarders to work off some or all of their board bills (a common practice that raises concerns well beyond the scope of this article), details of such arrangements should be stated in the boarding contract.

Insurance

The contract should require the horse owner to provide information about insurance coverage in place for the animal, if any, along with contact information for the policy carrier. Language might include: “The Owner is solely responsible for maintaining any insurance on horses boarded under this agreement. The Farm does not provide insurance coverage on boarded horses. If the horse is insured, the Owner shall provide that information to the Farm. If insurance on a boarded horse is obtained at a later date, the Owner shall immediately inform the Farm of such coverage.”

Getting Paid

The horse owner’s agreement to pay the board bills and other expenses, along with the farm’s billing schedule (monthly billing, for example), collection practices (such as when a bill will be considered to be in default and interest charges for overdue bills), and the procedure for disputing erroneous charges should be included in the contract. Here is an example of such language: “The Farm shall furnish to the Owner a monthly statement of the board and expenses incurred by each horses boarded under this agreement. Owner agrees to pay the amount due as indicated on each monthly statement within 15 days of the date of the statement. An interest and bookkeeping charge totaling 1½ per cent (1½%) per month shall be added to the Owner’s bill for any amount unpaid within 30 days of the original billing date.”

Delinquent Bills

Overdue bills are the bane of every boarding stable. Written contracts cannot guarantee that every boarder pays on time, but a clause granting the farm owner a security interest in the horse being boarded can facilitate the process of selling the animal to satisfy the bill. The example of a security interest provided below should be reviewed with your attorney to be certain that it satisfies the laws of your state.

“Owner hereby grants and conveys to the Farm a security interest in the horse or horses being boarded to secure payment of all costs, including attorney fees, associated with the horses or horses and hereby appoints [identify the Farm owner] as his irrevocable attorney-in-fact to file any and all necessary financing statements to perfect such security interest. This contract may serve as a financing statement. The parties specifically agree that the Farm may exercise any and all rights of a secured party under Article IX of the Uniform Commercial Code.”

While a written contract and filing with the proper state authorities are necessary for a valid security interest, most state also have on their books things known as “lien statutes” that provide some protection for boarding farm owners who do not have a written contract with the delinquent boarder. Usually called “agister’s liens,” these statutes provide a judicial mechanism for a farm owner who needs to sell a horse to pay an overdue bill. The requirements for an agister’s lien vary from state to state, and going to court can be time-consuming, another incentive for using properly drafted written contracts.

Risk of Loss

It should be clear that the owner of the horse, and not the boarding farm, bears the risk of loss if the horse is injured. For example: “The Farm shall not be liable for accident, injury, disease, theft, or death of any horse while in the custody and care of the Farm. Owner agrees to release and hold the farm harmless for any and all losses resulting from accident, injury, disease, theft, vandalism, lighting, flood, earthquake, or other act of God, whether foreseeable or not. This release shall include the ordinary negligence of the Farm’s owner and employees. The Farm recommends that the Owner obtain insurance to compensate for such potential losses.”

Personal Injury

The owner should assume responsibility for personal injuries caused by her horse. Language that might cover this could be similar to the following: “The Owner agrees to be solely responsible for the behavior of the horse or horses being boarded under this agreement and to hold the Farm harmless for any and all damages resulting in any way from the boarding of the Owner’s animals. The Owner further agrees to reimburse the Farm for reasonable attorney fees, damages, and costs that arise from defending a lawsuit related to injuries or harm caused by, or related to, the horse or horses being boarded.”

Nearly every state (all except California, Maryland, Nevada, and New York) has enacted some form of equine activity liability statute. These statutes typically limit the liability of a farm owner or equine professional, provided that conspicuous signs are posted warning participants of the inherent risks of being around horses. The same statutory language—prominently displayed in bold face type—also should be included in every boarding contract. Failure to do so may make it impossible to rely on the statute as a defense to a personal injury lawsuit.

The contract also should state the farm’s policy for horse owners who want to bring their dogs to the farm. If dogs are allowed, their owners should assume responsibility for any harm the dogs might cause.

Take-Home Message

A well-written, up-to-date contract can reduce, and sometimes eliminate, the misunderstandings that often plague boarding arrangements. Contracts should be updated on a regular basis to reflect changing business plans, preferably with input from an attorney and accountant. Protecting your business is too important to be a do-it-yourself project.