Breeding Contract Check-Up
Breeding season begins soon. Stallion managers and owners can plan ahead by reassessing and, where warranted, updating their contracts. How? Here are a few suggestions.
Availability of the Stallion
For collection (such as A.I) or live cover breeding, availability of the stallion is critical. But sometimes the stallion is already committed to a showing or racing schedule. If the stallion’s availability is limited to a range of months, the breeding contract can specify the time frame.
Breeding contracts can potentially involve a series of fees and charges. For example:
- Fees. In addition to the stud fee, stallion owners and managers sometimes include booking fees, collection fees, straw fees, chute fees, and/or others.
- Deposits. Breeding contracts often involve deposits, such as semen shipment container deposits. The contract can explain these deposits as well as conditions for refunds.
- Late payments. When mare owners fail to make timely payments, stallion owners and managers might want to reserve the right to recover late payment fees or interest. The problem is, sometimes these charges are excessively high or violate state laws.
- Tax. Is the breeding arrangement taxable under applicable law? If so, the contract can identify who is responsible for paying the sales tax.
Release of Liability (Where Allowed by Law)
Stallion owners and managers can consider including a carefully worded release of liability (where allowed by law) within their contracts. Keep in mind, of course, that having a release does not eliminate the need for having proper liability insurance. People who sign releases can, and sometimes do, file lawsuits.
Equine Activity Liability Act Language
As of October 2015, 47 states nationally have passed equine activity liability acts. These laws, in various ways, limit or control certain liabilities in horse-related activities. Many of these laws require contracts used by “equine professionals” (and horse breeders sometimes fit within that category) to include certain “warning” or other language.
The terms “Guaranteed Live Foal” can generate different understandings. For example, some interpret the phrase to mean a foal that can stand and nurse, or a foal that survives for 24 hours (some contracts extend this to 72 hours) after birth, or the survival of one twin foal. To avoid misunderstandings, the contract can define the terms.
Breeding contracts can include several other provisions, such as:
- Defaults. Rights and remedies in the event that one party violates the contract (such as the right to collect court costs and attorney fees).
- State law. Which state law governs the contract?
- Optional arbitration or mediation of disputes. Many believe that arbitration is faster and cheaper than court proceedings. Stallion owners who want to retain this option can include arbitration and/or mediation of dispute clauses within their contracts.
- Modifications/Amendments. The contract can specify that modifications are only valid if in writing and signed by both parties.
These are just some ideas for equine breeding contracts. Stallion owners and managers have numerous options based on their operations and applicable law. Good breeding contracts are a starting point – stallion and mare owners should also strive to follow the policies and responsibilities that they have set within the contracts.
This blog post does not constitute legal advice. When questions arise based on specific situations, direct them to a knowledgeable attorney.
Julie Fershtman is considered to be one of the nation's leading attorneys in the field of equine law. A frequent author and speaker on legal issues, she has written over 400 published articles, three books, and has lectured at seminars, conventions, and conferences in 29 states on issues involving law, liability, risk management, and insurance. For more information, please also visit www.fershtmanlaw.com and www.equinelaw.net, and www.equinelaw.info.View All Posts by Author ›
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