What Makes A Valid Contract

[kaykay]

Dont want to steal Tanyas post. But so many ask about how to write contracts etc. First I am not an attorney and dont pretend to be one. Ultimately if you have the money I think it is best to pay an attorney to write your farm contracts. Most farms dont like to post their contracts on a public forum so it is kinda hard for new people to know what they should include in a contract etc. Maybe more can post their tips on contract and what they always include

To make a contract valid it has to have basically 2 things.

Agreement (offer and acceptance) Basically 2 signatures of 2 mentally competent people of legal age agreeing to what is written

Consideration--Something of value must be exchanged. This can be money, a horse in trade, labor etc. Just something of value

You can hand write a contract on a napkin and as long as the other person signs it it is a legally enforceable contract.

So lets say I write a gelding contract. It says "said horse must be gelded by 11/01/09. Upon vet proof that the gelding procedure was done, registration papers will be handed over to the buyer. If the buyer does not geld the horse, an additional payment of 1000.00 will be due to the seller by 11-10-09.

So lets say the buyer doesnt geld and doesnt send me my 1000.00 dollars. Now I can file a lawsuit against the buyer for damages of 1000.00

I do think its best to always put what will happen if a buyer doesnt follow through. That way it is clear what is expected and what will happen.

Its also always good to put in any contract that if a person decides to sue you--- the seller----- they must file in the county and state that the seller lives in. That way if someone does sue you -- they have to come to your state and you dont have to travel to defend yourself or get an out of state attorney.

Another thing that throws a lot of people is that once you buy a horse the horse is yours. Weather its still at the sellers farm or not. So many write this in the contract. For example

Buyer aknowledges that with this payment on XXXX horse they are the sole owner of the horse. Should XXXX get injured, sick or die, it is the sole responsibility of the buyer. It is recommended that the Buyer carry Equine Mortality Insurance on XXX horse until it arrives at the Buyers farm.

 

[Becky]

Good points all, Kay.

On contract sales/leases, I don't consider a deal done unless I have a signed contract. The horse involved is still up for sale/lease until I do.

I also wanted to point out that a contract appears to be meaningless to some people. Unless you are prepared to take them to court, if they back out, there's not much you can do otherwise. Bottom line on that is to never let your horse leave your property until paid in full on a sale.

 

[Jill]

All common (and basic) sense.

 

[Bess Kelly]

Dates and terms. Must have these in contract. Date made, pick-up "XYZ", pay payment 1, etc.

If no dates, well not a lot to enforce. And always state the venue because in most contracts, if things are not clearly stated, you end up with traveling as lawsuits are generally brought at the location of those charged.

Another reason people should make it clear the horse is BUYERS at once is the time between buying and receiving

Some are just not aware that possession is not what matters. So an animal in transit or even at the sellers waiting to wean, breed, etc., is the buyers responsibility (save some care and custody issues). Have a paragraph about notification for illness, emergency actions, responsibility for vet care costs, when must pay (your vet usually charges YOU)....and so on....seems it is not a needed thing but, it may be.

Also, selling a mare in foal, on payments --- think about this. Mare foals, buyer stops payments, mare is returned to seller, foal is property of buyer. Hmmmm.

Breeding contracts. Yep. I stated conditions for the LFG should stallion becpme sterile or die prior to any loss of foal, how long after notification of breeding completion to pick-up of mare, increased mare-care after, etc., earliest date they could deliver mare for breeding, etc. Remember, stallion owners, you have obligations and constraints, cover yourself. Now, I've done differently with friends but, for those you know only via these situations you need to keep things written clearly.

 

[kaykay]

Thanks for adding to this. I do think its hard on new people to understand all this, especially about posession. That seems to be mind boggling to some who arent used to a horse contract. It is hard because we are all dealing with live animals verses a car or a boat.

And dont always assume that people wont sue to enforce a contract. It happens all the time. I agree that some wont bother but others definitely will.

 

[~Lisa~]

Well just cause you write it in a contract doesnt mean it will hold up in a court of law.

It is a good basis for the judge to understand the agreement between the 2 of you but it is the same as a say valet parking stub which says no matter what they do they are not responsible however if they get in your car and crash it from being negligent they can be held liable.

My understanding from attorney family members is you can not contract away the law even if both parties sign.

If a horse you sold that is at your house waiting to be transported gets hurt from your negligence you can be held responsible especially if you are accepting board money for the horse.

It is not always as cut and dry as made in the contract but like I said it is a good start and shows the intent of both parties

 

[JWC sr.]

Great post, I love when the brilliant minds of so many work on any specific problem or question.

One other thing I would add is as our atty. has explained to us in our Environmental business many times. To Quote him "A contract in the State of Texas is a great place to start and the more detailed it is the better it is, but that does not keep a person of other party from filing or pursuing a law suit".

The way he explains it is that even though the law is "supposed" black and white, it never is. He likens it to a poker game where yours cards are played against the other parties cards to see who has the better hand. Your job when entering into a contract is to make it as easy to understand for a potential jury to understand and interpret. I personally hate that analogy, but it has proven to be right over the years for us.

 

[Jean_B]

One thing to remember - a contract works as long as you maintain control of the horse until the buyer has paid for it or you have the means to go repossess the horse.

Case in point - Like a dummy, years ago I allowed someone to make the last payment for a horse with a personal check at the time of pickup...and the check bounced and they refused to make good on it. Yes I had a contract, and yes I did go to court and get a judgement against her and yes, I did file that judgement in her home state (which will screw up her credit rating for 10 years). But because she has no job I was not able to get a garnishment order against her and I couldn't get one against her husband because she was the one that signed the contract. (Was too far away to make it worth my time to go repossess the horse.)

Which is why no horse leaves my place until fully paid for and all payments clear the bank....or they pay cash at the time of pickup.

Also remember that if you have a contract and if the buyer doesn't pay up - it is a civil matter - not a criminal matter. If someone comes to your place and says I will pay for the horse and you are dumb enough to let them have it without a contract - THEN they can be charged with the crime of horse theft.....though some attorney might argue that a verbal agreement constitutes a contract....but I don't buy that. So in civil matters, in most states you can seek relief through the small claims division of the court.

 

[Feather]

Contracts: Minimum requirements

1) Date of Contract

2) Signed by Seller

3) & date signed

4) Signed by Buyer

5) & date signed

6) Consideration/amount given for purchase

7)Purchase of what/description

Contract Title/Type -- Not required

Now, all other stuff added is only to clarify exactly the terms that both seller & buyer have agreed to.

Mentally think, if I had to explain a "Sour deal" to a third party is it sufficient to allow their impartial understanding to

to decide in a proper/fair settlement for all concerned parties?

Businesses add paragraph's to their contracts every time they go o court or have a problem to fix it in their favor next time around.

But you may have trouble getting a new owner to sign a 5 page contract.

Best to cover the basic problem areas for your sisuation & then be very choosey whom you sell to.

Contracts are binding BOTH ways.

 

[Feather]

Contracts: Minimum requirements1) Date of Contract

2) Signed by Seller

3) & date signed

4) Signed by Buyer

5) & date signed

6) Consideration/amount given for purchase

7)Purchase of what/description

Verbal contracts are very valid but next to impossible to prove in court EXCEPT in specific contacts

Example: Real Estate MUST BE IN WRITING ONLY.

Contract Title/Type -- Good but Not required

Now, all other stuff added is only to clarify exactly the terms that both seller & buyer have agreed to.

Mentally think, if I had to explain a "Sour deal" to a third party is it sufficient to allow their impartial understanding to

to decide in a proper/fair settlement for all concerned parties?

Businesses add paragraph's to their contracts every time they go o court or have a problem to fix it in their favor next time around.

But you may have trouble getting a new owner to sign a 5 page contract.

Best to cover the basic problem areas for your sisuation & then be very choosey whom you sell to.

Contracts are binding BOTH ways.

 

[Frankie]

Usually what ends up being a "good" contract, is only because you are dealing with 2 good, sensable people. Because that is not always the case, contracts end up being pages long. I have signed huge contracts and most was due to previous buyers.

Then you get into interpretation of something written. You don't think about it until it comes up. I can read something and it only mean one thing to me, until a problem comes up and it was meant to be another way.

For me, the best "contract" I have ever had was verbal, never signed a thing. But we both did what was agreed upon and there was no problem.

I have chosen to remain with that type of contract, as it has proven to be what works. But again, trusting and sensable people.

So many situations come up, dealing with so many types of people. If you don't know the person, I suggest you start with a basic contract and add page 4 through 31, as needed.