By Julie I. Fershtman |
Courtesy of America’s Horse Daily
What mare owners should look for in a typical horse-breeding contract
The right breeding contract between a stallion and mare owner can prevent a number of foreseeable problems. Both stallion and mare owners are sometimes surprised to learn – especially after things go wrong – that their breeding contracts have failed to address critical and foreseeable problems.
If you are breeding a mare this season, as you go through the process of selecting a stallion, here are some elements of breeding contracts in the equine industry to consider.
Contracting With the Right Person
Mare owners should make sure that the one with whom they are contracting has authority. Never accept a contract signed by an employee or agent unless you have first confirmed that the party presenting the contract and signing it has authority to do so. If the stallion is managed by someone other than its owner, the contract can specify that the manager has authority to transact business on behalf of the owner and, of course, execute contracts. And unless a farm name is a true legal entity (such as a corporation or limited liability company), it should not be named as a party to the contract.
The contract can include a clause stating that the party signing the contract on behalf of an entity (such as a partnership, corporation, or LLC) is duly authorized to do so and to bind the entity to the terms of the contract.
This issue has actually come up in litigation over the years.
The stallion’s availability during the breeding months is critical: Some stallions maintain showing schedules while advertised to the public for breeding. For breedings requiring timely access to the stallion – breeding with fresh semen via live cover or artificial insemination, or cooled shipped semen (as opposed to frozen semen that can be stored for shipment) – the contract can specify a range of dates or months in which the stallion is available.
Disclosure of Diseases and Hereditary Conditions
The health of the stallion is vitally important as it can directly affect the health of the mare, her offspring, and even the mare owner’s farm.
The breeding contract provides an excellent opportunity for the stallion owner or manager to certify that the stallion is in good health and whether or not, for example, he is a carrier of diseases such as equine viral arteritis (EVA), hereditary equine regional dermal asthenia (HERDA) or hyperkalemic periodic paralysis (HYPP). Mare owners might want assurances within the breeding contract that the stallion has been tested for any or all of these.
To prevent surprises and stay within budget, mare owners can look to the contract to specify fees that the stable expects to charge in the breeding process. By listing fees and charges, the parties to the breeding contract can avoid disputes and clarify the process.
Mare owners should examine the contract for fees such as:
- Shipped semen collection fees and/or shipping fees
- Shipping container deposits and refund terms for the deposit
- Booking fees: While breeding farms vary in their reasons for using a booking fee, a common reason is to secure a spot on the stallion’s breeding list for a given year.
- Sales taxes
- Other services that the stallion manager might secure for the mare and pass along to the mare owner for payment, such as veterinary fees and expenses associated with the breeding process, including uterine culture tests, ultrasound, hormonal treatments, etc.
Look for dates when payments are due. Contracts frequently address nonpayment or late-payment problems, such as late-payment fees and interest on unpaid balances. While reasonable late-payment fees are commonly found in equine industry contracts, interest rates can vary considerably because state laws regulate maximum interest rates. What is legal in one state could be considered excessively high in another.
In the American Quarter Horse industry, breeding contracts customarily come with a “live foal guarantee.” Some stallion managers even offer “live color foal guarantees.” As simple as the terms may seem, they can generate widely different expectations among mare owners and stallion management. To prevent misunderstandings, the breeding contract can define these terms.
As examples, the live foal guarantee can be defined as:
- A single foal that can stand and nurse; or
- A foal that survives for 24 hours (some contracts extend this to 72 hours) after birth
Less common are “no guarantee” breeding contracts in which the mare owner receives a breeding right for a season, but no rebreed rights follow if the mare fails to generate a live foal. In other breeds where frozen semen is the norm, occasionally stallion owners will offer frozen semen straws for sale with no return rights, no guarantee of fertility and no live foal guarantee.
When a broodmare is stabled at the stallion owner’s facility, disputes sometimes arise when management arranges for the mare to receive professional services such as veterinary or farrier attention.
Mare owners can request a contract that stipulates advance notice and an opportunity for the mare owner to consent to such services (except, possibly, in emergency situations when the mare owner can’t be reached). Or, if the mare owner does not approve certain procedures, such as invasive testing, he or she can insist that the contract specify that no permission is granted for specified services.
By comparison, stallion managers handling visiting mares often prefer language within the breeding contract giving broad authorization to arrange for routine or emergency professional services at their discretion, such as inoculations, reproductive examinations, hoof trimming or others.
Entitlement to Refunds
The breeding contract can specify whether or not and when the mare owner is entitled to receive a partial or full refund.
For example, the mare owner might only have one mare to breed. If something happens to the mare before the breeding takes place, a refund would be far more important than an option to breed with a substitute mare.
Conversely, if the mare owner is interested in the genetic match between the mare and a specific stallion, should that stallion die or become infertile before the breeding can take place, a refund would be far more important than the stallion owner’s right to select a substitute stallion to fulfill the contract.
Mare owners who seek to fulfill re-breed rights under the breeding contract are sometimes surprised to learn that they are expected to pay additional booking fees. To avoid misunderstandings on the issue, mare owners should look for how the contract defines re-breed rights.
About the Author
Julie I. Fershtman is one of the nation’s most experienced equine law practitioners and is also author of three books on horse-related law. Her website is www.equinelaw.net.