PH: Are there any "red flags" we should look for in a contract that's given to us to sign?
Watch out for contracts that virtually give the stable full ownership of your horse if you have fallen behind on payments, with no advance notice to you. The fact is, most states have laws addressing this situation, and these laws require the stable to comply with the most basic and fundamental principles-proper notice before depriving someone of his or her personal property. Those laws were designed to be fair.
Contracts that instantaneously give the stable your horse, without enough advance notice to the boarder and fair procedures for a sale, I believe, are trouble. They might also be illegal.
PH: Now let's put the shoe on the other foot. We own a farm (but not a big, formal boarding facility) and are contemplating taking on a few boarders to help defray expenses and to have companions to ride with us. What parts of the boarding contract should be the most important to us?
The size of your operation really does not matter. Believe it or not, many of the elements of boarding contracts that the "big operators" use apply equally to the smaller operator.
Just like the big players, small stable operators want to be paid for their services, facilities and time. That is, the small boarding business operator can set forth due dates, late payment fees, and a lawful rate of interest on unpaid balances.
Since we recognize that small business is still "business," let me digress for a moment to discuss liability insurance. Many small boarding stable operators assume that they're covered under their homeowner's insurance policy. That's wrong. These policies usually have a "business pursuits" exclusion that would prevent coverage altogether if something wrong happens in the business setting, such as one of your two boarders were injured at your barn.
To avoid this problem, boarding stable operators of every size definitely should purchase a policy of insurance designed for business operations, such as a policy of Commercial General Liability Insurance. It's true that these types of liability insurance policies can be expensive, but the "sticker shock" can be overcome pretty quickly when you realize that the expense can be passed along.
As an example, let's say your commercial insurance costs $1,200 a year, which, of course, breaks down to $100 a month. If you have four boarders and you simply charge each boarder $25 more each month, you have recouped that cost.
PH: You spoke about the importance of good communication. What would be a good way to approach asking someone to sign a boarding agreement, especially if they're a friend or you think they may be offended and assume that the contract was because you don't trust them?
Everybody benefits from an agreement that has been confirmed in writing. Verbal agreements can be a problem because nobody can prove what was agreed upon.
For the boarder, a well-written boarding contract is especially beneficial because it can list services that the boarder expects to receive and that the stable has agreed to provide. If the stable promises to clean stalls once a day, fill water buckets four or five times a day, give free-choice hay, hold your horse for your farrier or vet (without charging you), and give your horse turnout each day except in inclement weather or excessively muddy conditions, the stable should not hesitate to put this in writing if you ask.
Even if the boarder and facility owner are good friends, the mere process of developing their written contract can be a wonderful opportunity to communicate about the services that the horse owner expects and what the stable, in turn, expects from the owner. You can write your agreement together now and avoid misunderstandings, bitter feelings, and possibly even a lawsuit in the future.
PH: What's your thought about the boarding contracts that you can buy in books?
In my opinion, contracts of any kind that are found in books, available online, or sold in stores are, at best, a starting point from which a person can develop a good one. I have never seen a contract from any of these sources that I have found satisfactory, and, in fact, several of the forms that I have seen are illegal.
One prime example concerns Equine Activity Liability Acts. Forty-six states now have some form of equine liability law on the books. Many of these laws directly affect boarding contracts by requiring them to include "warning" or other language. "One-size-fits-all" forms run a serious risk of failing to include this language. I have seen forms that include illegally high rates of interest that a stable will charge on unpaid balances, too. Waiver/release language, in the standardized forms I have seen, failed to meet requirements under several states' laws.
PH: Can you give us a "for instance" story where a contract was a benefit for both parties?
I laugh as I hear this question. Remember, I'm a lawyer, and people tend to call me when there's a problem.
People tell me they were satisfied with the detailed contracts I prepared for them because I got them thinking of problems that they'd never imagined were possible and finding ways to deal with these problems now-before the problems arose. That's what effective contracts do. Contracts, if done right, have the potential to avoid thousands of dollars in legal disputes.
