EQUESTRIAN QUESTION FORUM: by Lisa L. Lerch, Esq.

Should I use a contract in a horse transaction? Absolutely!

A contract establishes the rules for the transaction. An equine-related activity that is entered into without a written agreement has the potential to unravel very quickly, often leading to the loss of a beneficial relationship. Most lawsuits happen because of a misunderstanding between the parties. A written contract sets forth the various rights, responsibilities, and possible liabilities between the parties, and is the best way to avoid problems and stay out of court.

Equestrians love the simplicity and tradition of the handshake deal. However, it is the ambiguity of this type of deal that is often the source of misunderstandings. Oral contracts are valid and enforceable in California, but they rarely discuss the details of the transaction. Ultimately, litigating an oral contract turns into a war of words and is reduced to an assessment of which party is more believable.

One of the most common excuses I hear for not using a contract is, “It takes too much time and costs too much money.” As horse owners, we happily spend hours of our time researching the “perfect” saddle and spend ridiculous amounts of money for our four-legged family member, so there is really no excuse for purchasing a horse on a handshake. It is much more cost effective to proactively determine how to deal with a potential problem that it is to litigate after the fact. One of the best options available parties is to determine whether the parties would like to mediate or arbitrate the matter should a disagreement arise. These avenues are often much less expensive and less time consuming than traditional court proceedings. Parties also find it is easier to agree to conflict resolution before a problem has occurred.

There are many standardized contracts available to the equestrian community. However, just because they have been made available to the mass market doesn’t mean they will meet the specific needs of the parties involved. At the very least, an attorney should always review any paperwork to ensure all aspects of the transaction are adequately addressed.

At a minimum, a basic contract should contain the following:

1. Name the parties to the transaction

2. A detailed description of the horse

3. Detailed terms of the transaction

4. A provision on how a default or disagreement will be handled

5. The county or city the parties wish to litigate if there is a disagreement

6. A determination of attorney fees and costs if there is a lawsuit

An important note for all horse purchasers is that a “Bill of Sale” is typically only a receipt of a sales transaction and is not a contract capable of addressing the information set forth above. A “Bill of Sale” is often an “AS IS” sale and the purchaser is left with little protection if the horse doesn’t work out.

If the transaction amount is greater than $7,500.00 (the maximum amount you can sue for in small claims court in California) it may be worth investing a small amount of money to have an attorney prepare your paperwork.

Every horse transaction is unique to the parties involved; make sure your paperwork is unique as well.

If you would like more information on this or other topics please feel free to visit my website or contact my office.

Lisa L. Lerch, Esq. Office 714-993-3590

17476 Yorba Linda Blvd. Facsimile 714-993-9257

Suite 212 lisalerch@legalequestrian.com

Yorba Linda, CA 92886 www.legalequestrian.com

This article is meant to provide general information only and is not intended to constitute legal advice. The information in this article is not intended to establish an attorney-client relationship between attorney and reader. The contents of this article are not a substitute for seeking the advice of legal counsel.