Contract savvy for half leases

MS-MR-1-Leases71by Marilyn Munzert
The Half Lease is an agreement between a horse owner, who wants to reduce their horse expenses, and someone who would like to have access to riding a horse. The owner, or lessor, splits the horse’s care expenses and riding time with a lessee. It can be a beneficial way to save money on board, feed, vet bills, etc., and it can be great for your horse if your own saddle time is limited. With respect to the lessee, a half lease can act as a steppingstone into horse ownership.
However, it’s not an agreement that should be taken lightly. In fact, it’s a deal that should be in writing — every time. Without a written contract that clarifies the arrangement between the parties, resolving disputes over arrangements is never easy, quick, or cheap.
Three hypothetical scenarios to show the importance of certain contract provisions and the bullet points every contract should include, should you decide to draft a half lease contract, are covered in this article. This article is not meant to replace an attorney, but just be an informational starting point.
1. The first scenario states that Mary is half leasing Bandit, her 15 year old Quarter Horse gelding, to her friend Kevin. During one of Kevin and Bandit’s rides, the horse spooks at the delivery truck driving past the arena. The quick movement unseats Kevin, and he falls off, breaking his arm. Kevin then decides to sue Mary for the cost of medical expenses.
This is one of the most important factors for the horse owner to consider, and Mary should have a liability release drafted, by an attorney, which will hold up in court. Because the horse is being used in a half lease, the owner accepts a degree of risk that someone might be injured by that animal.
Make sure your state will enforce a properly worded release of liability. Remember that people who sign releases can and do sometimes sue. The release might cause a dismissal of the case, but not always. Don’t assume that a release will be effective for a minor who’s injured. A release signed by someone under 18 isn’t valid. Even is the parents sign for the child, there could be some issues. Some states won’t enforce it and some will.
2. Cody half leases Bella, his Arabian mare to his friend Bill. Bill rides the mare three times a week, and both men are happy with the arrangement. After six months of half leasing, Bill loses his job and can no longer afford to pay half of Bella’s board and care.
In this situation, a solution could’ve been written into the contract. If the match of the horse and the lessee is unsuitable, or if economic or geographic circumstances change, the lessee may want to have an escape hatch built into the contract.
3. Natalie half leases her 6 year old gelding Jack to Tess. After nine months into the agreement, Tess decides to take Jack to a local show. While there, the gelding colics severely and Tess calls her vet. The doctor determines that it’s an emergency situation, and that the gelding needs immediate surgery. Natalie is out of town and can’t be reached, but Tess gives the vet the green light. When Natalie returns, she refuses to pay for half of the surgery.
Though not all emergency situations or injuries can be accounted for in a contract, there are three options on how to cover this in the agreement.
Option one says that if anything happens under the lessee’s watch the lessee bears responsibility. Option two says that if the lessee was negligent in the case of the horse — and that negligence caused the injury — then the lessee is responsible for the fees and costs. And option three says that the lessor and lessee split all costs during the terms of the lease.
Consider adding these provisions to your half lease contract.
• How long the agreement will last, complete with start and end dates.
• A schedule of the horse’s use — when each person can ride or otherwise use the horse.
• What payments are due, when they must be made, and to whom.
• Obligation for each party to pay the horse’s maintenance expenses or to submit the payment directly to someone else (e.g. the boarding stable, farrier, etc.)
• Who pays major veterinary expenses.
• The type of use of the horse — what’s permitted and what isn’t.
• Where the horse will stay during the agreement.
• Restrictions (e.g., the owner may not want the horse to do certain events.)
• Liability waiver and release with indemnification (a transfer of risk of litigation) release, where allowed by law, and with state-specific language.
• Who’s allowed to make decisions in a medical emergency, and who’ll pay for those procedures as well as follow-up care and expenses.
• Equine Activity Liability Act language (some states require this).
• How the arrangement will end, including advanced notification for termination.
• An optional “escape hatch” clause in case a party’s circumstances or interest level changes.
• A standard care for the leased horse during the arrangement.
• Which state’s law governs the arrangement, and where disputes should be brought.
• How any legal disputes will be addressed, and who pays the legal fees.

2015-12-08T15:21:31+00:00December 8th, 2015|Mane Stream Articles|0 Comments

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