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What’s the Problem with Verbal Contracts?

Verbal Agreement HandshakeFor decades, this author has written articles on the importance of getting equine-related agreements in writing. Some of the articles even shared common characteristics of effective contracts. Still, people in the horse industry continue doing business with nothing in writing, and disputes have occurred. This article explores what can potentially happen when verbal contract disputes become the subject of a legal battle.

Real Cases Where Verbal Contracts Failed

Over the years, verbal contract disputes have generated legal battles.  Here are three examples of cases where verbal agreements failed in court challenges because of state laws:

  • In a 2003 case from Maine, a verbal agreement regarding ownership, care, training and racing of thoroughbred racehorses was found to be void and unenforceable based on a state law [Maine Statute of Frauds, 33 M.R.S.A Sec. 51(5)] that required certain types of contracts to be in writing. The verbal arrangement in that case, the court found, violated the law.
  • In a 2000 New York case, the court refused to enforce a verbal contract involving the boarding, breeding and care of mares and resulting foals. In doing so, the court relied on a state law [New York General Obligations Law Section 5-701] that required certain types of contracts to be in writing to be enforceable.
  • In a 1972 New York case, the plaintiff was a horse buyer who claimed to have a verbal agreement to buy the defendant’s racehorse for $60,000. The seller denied an agreement existed, however, and no written contract existed. Arguing that the alleged verbal agreement should not be enforced, the seller cited a different state law [New York’s Uniform Commercial Code, Article 2-201], which required contracts for the sale of goods priced at $500 or more to be in writing. Based on the law, and taking into account circumstances of the dispute, the court ruled that no enforceable agreement existed.

Equine Industry Statutes That Can Make Contracts Important

Aside from general state laws referenced in the cases described above, that can apply to a wide variety of industries, many states have laws unique to the equine industry. These laws sometimes make written contracts important, if not necessary. For example:

Equine Activity Liability Statutes.

Currently, 48 states (all but California and Maryland) have some type of equine activity liability statute. Some require written contracts.  Arizona’s law, for example, provides no protection unless the equine activity participant has signed a “written waiver” that includes specific language supplied in the law. Similarly, West Virginia’s law requires participants to sign a written statement using language that the law provides. Under the laws in a small number of states, “equine activity professionals” or “equine activity sponsors” will lose any benefits in their equine activity liability statute unless their written contracts include the law’s “warning” language or other language as the law specifies.

Equine Sale Disclosure Laws.

California, Florida, and Kentucky have equine seller disclosure laws, which can impact the language of certain equine sales contracts in those states. Kentucky’s law requires, among other things, written bills of sale and disclosure of agency relationships in sales transactions involving race horses. Florida has an equine sales statute that requires, in part, that sellers and agents in Florida horse sales use written disclosures and consent agreements. California’s Business and Professional Code can impact sales contracts involving racehorses in that state as it requires written bills of sale, disclosures of commissions, and more. 

What Happens in a Verbal Contract Dispute?

When legal disputes involve a verbal agreement, resolving them is never quick, easy, or cheap. Why? With nothing in writing, each party to the transaction usually will have a totally different understanding of what it involved. As a result, the outcome of lawsuits can be uncertain, but what is certain is that legal fees could be very expensive.

This article is not meant to suggest that written contracts will prevent all disputes from occurring. Sometimes even the most sophisticated contracts can generate legal disputes. To their credit, however, written contracts can help narrow the grounds of a dispute, which can save time, money, and aggravation.

This article does not constitute legal advice. When questions arise based on specific situations, direct them to a knowledgeable attorney.

Categories: Contracts, Lawsuit

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is considered to be one of the nation's leading attorneys in the field of equine law. She has successfully tried equine cases before juries in four states. A frequent author and speaker on legal issues, she has written over 400 published articles, four 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.

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Fershtman’s Book Wins National Award

Julie Fershtman’s latest book, Equine Law and Horse Sense, won its fourth national award on May 31, 2021. It was selected to receive a "Finalist" Medal in the 2021 Next Generation Indie Book Awards. 

The 2021 Next Generation Indie Book Awards are presented by Independent Book Publishing Professionals Group, which is the largest International awards program for indie authors and independent publishers. Here’s a link for the complete list of 2021 winners and finalists: https://www.indiebookawards.com/winners.php?year=2021 

Fershtman’s Book Receives Award

Julie Fershtman’s book, Equine Law & Horse Sense, published by the American Bar Association, has been selected to receive a 2020 NYC Big Book Award in the category of “Reference” books.

The NYC Big Book Awards draws nominations world-wide. This is the third award for Fershtman’s book since its publication last year. Here is a link for more information, and to see the list of winners: https://www.nycbigbookaward.com/2020winners

Information on the book: https://www.amazon.com/gp/product/164105493X/ref=dbs_a_def_rwt_hsch_vapi_taft_p1_i0

Fershtman’s Book Receives Award

Julie Fershtman’s book, Equine La & Horse Sense, published by the American Bar Association, has been selected to receive a 2020 NYC Big Book Award in the category of “Reference” books.

The NYC Big Book Awards draws nominations world-wide. This is the third award for Fershtman’s book since its publication last year. Here is a link for more information, and to see the list of winners: https://www.nycbigbookaward.com/2020winners

Information on the book: https://www.amazon.com/gp/product/164105493X/ref=dbs_a_def_rwt_hsch_vapi_taft_p1_i0

Our Equine law blog (and its author) in the news!

Julie Fershtman, author of our popular and prolific Equine Law Blog, was interviewed by the State Bar of Michigan. The interview, which called Fershtman "Lawyer-Blogger," discussed our Equine Law Blog. We truly believe that this blog is the nation's most active blog serving the equine industry on equine law topics, and we thank you for visiting it. Read more here.

Julie Fershtman’s Recent and Upcoming Equine Law Speaking Engagements Include:

National Conference on Equine Law in Louisville, Kentucky on April 29, 2020. Topic will be on Waivers/Releases of Liability Involving Minor Participants. 

U.S. Hunter Jumper Association (USHJA) Annual Convention in Denver, Colorado on December 10, 2019. Topic will be on Equine Liability. 

IRMI Emmett J. Vaughan Agribusiness Conference (“AgriCon”) in Sacramento, CA (April 2019), and Richmond, VA (June 2019) and in Des Moines, IA (September 2019), on topics of “Equine Activity Liability Acts” and “Equine Mortality Insurance Disputes.”

National Conference on Equine Law in May 2019 in Lexington, KY, on the topic of “Equine Activity Liability Act Updates” and liabilities involving hosting of equine clinics. 

Agricultural Claims Conference in Kansas City, MO, in March 2019 on topics of “Loose Livestock Liabilities.”

2018 American Bar Association Annual Meeting in Chicago, IL, on “Equine Mortality Coverage and Disputes.”

November 2018, American Horse Council webinar on “Equine Liability.”

Honors & Recognitions

Equine lawyer, Julie Fershtman, has received these prestigious equine industry awards from respected equine organizations:

"Excellence in the Advancement of Animal Law Award" - American Bar Association Tort Trial & Insurance Law Section Animal Law Committee

"Distinguished Service Award" - American Youth Horse Council

"Industry Service Award" - Michigan Equine Partnership

"Catalyst Award"- Michigan Horse Council

"Outstanding Achievement Award" - American Riding Instructors Association 

"Partner in Safety Award" - American Riding Instructors Association 

"Associate Service Award" - United Professional Horseman's Association

"National Partnership in Safety" Award" - Certified Horsemanship Association 

What our Equine Law Services can Provide

Handling breach of contract, fraud/ misrepresentation, commercial code, and other claims involving equine-related transactions including purchases/sales, leases, mare leases/foal transfers, and partnerships.

Litigating disputes in court or through alternative dispute resolution (arbitration, mediation, facilitation).

Defending equine/farm/equestrian industry professionals,  businesses, and associations in personal injury claims and lawsuits.

Drafting and negotiating contracts for boarding, training, sales, waivers/releases, leases, and numerous other equine-related transactions.

Representing and advising insurers on  coverage and policy language as well as litigation;

Advising equine industry clubs and associations regarding management, rules, bylaws, disputes, and regulations.

Representing some of the equine industry's top trainers, competitors, stables, and associations.

Counseling industry professionals, stable managers, and individual horse owners. 

THE NATION'S MOST SOUGHT-AFTER EQUINE LAW SPEAKER

Did you know Julie Fershtman has spoken at the American Horse Council Annual Meeting, Equine Affaire, Midwest Horse Fair, Equitana USA, US Dressage Federation Annual Meeting, North American Riding for the Handicapped (now PATH International) Annual Meeting, American Morgan Horse Association Annual Meeting, American Paint Horse Association Annual Meeting, US Pony Clubs, Inc.'s Annual Meeting, All-American Quarter Horse Congress, American Youth Horse Council Annual Meeting, American Riding Instructors Association Annual Meeting, CHA Annual Meeting, and numerous others? Consider signing her up for your convention. Contact Julie.

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