It might seem like having any generic contract or liability release will cover your needs, but not all of them are legal for equestrian businesses—and the results of using the wrong one can be devastating.
By Kristin Pitzer
Striking a business deal is a tale as old as time, but in a society that’s increasingly litigious, NRHA Professionals need to do more than have a handshake and verbal agreement with their clients. To protect yourself, it’s best to have a contract that lays out the terms for the services to be provided and includes a liability release.
Jordan Willette, an attorney in Phoenix, Arizona, addressed the following five broad problems, presented with fictitious trainers, that you might experience when constructing a contract. Remember that laws vary by state. Consult your own state laws, ideally with an equine attorney, to ensure that you’re covered.
Part 1: The DIY Contract and ‘Inherent Risk’ Signs
Part 2: The Assumptive Contract and the Form Document
Part 3: The Termination Clause
The Termination Clause
The situation: Client Claudia wants to remove her horse from Trainer Ted’s program. She calls him to say she’ll be picking her horse up at the end of the day. It’s a week into the month and Claudia hasn’t paid her fees yet, but since they’re only a few days in, she believes she doesn’t need to.
The problem: Ted already cared for Claudia’s horse for part of the month, meaning he’s performed services she hasn’t yet paid for. If he didn’t have any type of contract with Claudia on file, he might be limited in the actions he could take.
However, Ted did have Claudia sign a contract—one that an attorney originally reviewed to ensure that all his bases were covered. The attorney also added in a legal termination clause to protect Ted in the event a client wanted to change or terminate their agreement. That clause requires a 30-day notice before removing a horse from the premises.
The solution: Sometimes relationships go south, and people want to sever ties immediately. Willette suggests using an attorney to draft a termination clause that’s appropriate for the services you provide. In many cases, Willette normally writes up contracts that can be terminated at will by either party, as long as the services covered have been addressed.
“Contracts should include a notice of termination and provisions for breach of contract,” Willette said. “For example, with a boarding contract, if a client didn’t pay their bill on time, there should be a grace period where after so many days, payment is due and late fees are imposed. Should the contract be breached, there should be a provision for the return of the client’s property and payment for services rendered. In the event that the breach of contract results in legal proceedings, attorneys’ fees and court costs shall be awarded to the prevailing party.”
Be cautious with liens, which are the right to keep property belonging to another person until they have paid a debt, as they are state-specific. Under some states, they’re not enforceable or require certain paperwork to be filed with the county or state.
“My general advice is to follow state procedures for liens, and if you’re going to have it in your contract, be sure you know what the terms mean,” Willette said. “Have the terms delineated and list the steps that each party must take in order for the lien to be enforceable.”
Read the rest of this article at the links above.
