Once you’ve “put your work out in the world,” it’s technically a business as soon as it’s monetized! Whether that’s starting up your homesteading blog, opening a barn, or selling your creative work, even if it feels like a hobby, it becomes a business anytime money starts changing hands.

Businesses must use contracts to protect themselves, and their clients. Today we are sharing the contracts that equestrian businesses need to stay legally protected.

So, what steps exactly do you need to take to make sure that you’re running your equestrian business legally? There are a few ongoing legal needs to keep in mind.

First and foremost, I know that when starting a homestead, farmette, or ranch, we’re not focused on the law. We’re focused on the land-the animals, the crops, the harvest.

Rarely do we think about the legal side of things, and in a perfect world, we never would!

That is exactly why I’ve written this post. This will be an article that you’ll want to dogear and come back to as your equestrian business grows. In a best-case scenario, you’ll never need to rely on the legalities… but if you do, you’ll be able to quickly come back and reference them here. 

This is part 1 of a 2-part post. HERE, we’ll be breaking down how to audit your existing contracts without spending a dime. 

Table of Contents

1. Must have contracts for equestrian businesses
2. Contracts equestrian businesses need for specific scenarios 
3. What contracts do equestrian businesses need if people are coming onto your property? 
4. Tips for how to use contracts for equestrian businesses

All of the contracts that we use in our own equestrian business are available in the SHOP. This is where you’ll also be able to find the contracts that I write for all of my own clients. 

When it comes to contract law for your homesteading and/or equine law needs, let’s strip away the legalese. Much of what applies to businesses of any size applies to homesteading law and equine law….

As an equine attorney, my job is to simplify and demystify what may seem overwhelming: the legal side of owning a homestead. So, without further ado, let’s break down the most common contractual needs of any land-based business….

Must have contracts for equestrian businesses: 

Operating agreements:

If you have an LLC for your business, you need to have an operating agreement. 

An operating agreement is basically the “contract” that will govern your LLC. They’re actually not required in every state, but most banks will require that you have one in order to open a business bank account. The operating agreement will set forth how distributions and losses are shared, how the LLC is managed and taxed, how members can sell or replace shares, etc.

Are you unsure on if you’re going to add new members to your business someday? Your operating agreement, if written correctly, will cover all of this. How can your LLC be dissolved, restructured, or “wound up”? The language that you use in your operating agreement is imperative: if your LLC is involved in litigation, it will be considered an enforceable contract by the court.

There’s another reason why an operating agreement is imperative- it will protect you from something called “piercing the corporate veil”, which single-member businesses in particular are highly susceptible to. You can find more information about PCV here.

Your operating agreement should never be a simple, flimsy document. Like I said, not only is it a contract, but it’s the contract that governs your business. Choosing to have a lawyer draft this agreement can be the sole differentiating factor between running your business the way you actually intend, or letting your business be dictated by an erroneous document.

I’ve converted the operating agreement I wrote for my own businesses into a template, which is available for purchase here.

If you have a website, you need to make sure it is legal

Generally speaking, a website must contain three things to be as legally protected as possible:

1. A privacy policy: First and foremost, federal FTC laws require privacy policies. In other words, a website is breaking the law by not having one. You can find the one I draft for my own clients here.
2. A terms and conditions: While not a federal requirement, this is something I require my own clients to have. A terms and conditions acts as the contract that governs your website- just by accessing your website, users are agreeing to be bound by the terms in your terms and conditions. Why is this important? In short, if someone copies a portion of your website, such as a photo, or copy (which is, unfortunately, one of the most common occurrences I see working with online business owners), you will have a much better “legal leg” to stand on when you send a cease and desist letter, because the infringer will have also committed a breach of contract action. If you don’t have a terms and conditions, you’re relying on a common law intellectual property cause of action- in other words, a harder fight, which means more expensive attorney’s fees.
3. The correct information in the footer of the website. This includes a link to your privacy policy and terms and conditions, an up-to date copyright symbol, and a disclaimer, if needed. This site is the best example- because we share legal education (an industry that requires licensure), we have a legal disclaimer.

Contracts Equestrian Businesses Need for Specific Scenarios

Different contracts are going to be useful depending on your scenario; this should serve as a guide: 

Selling eggs, honey or some other crop

Typically, these transactions don’t require contracts…side of the road type deal…but if you’re running a larger operation, such as a flower farm, or selling anything online, you need an online Terms & Conditions. For example, what happens if the flowers get lost in shipping, etc.

Boarding animals

If you’re boarding any animals on your property, it’s incredibly important that you have a boarding agreement with the owner of the animal. This agreement should detail the length of the board, as well as the general terms of the boarding. For example, what will be fed, and when?

Allowing people to ride your horse

If you’re a horse owner, you’ve probably had people  ask to ride your horse a thousand times. Even though this seems like a harmless encounter, accidents can happen. While your family or friends aren’t likely to sue you in case of a serious accident, their insurance will be looking for someone to pay the bills. This is why you should always have riders sign a liability release waiver contract. Find templates here and read more on this below!

Selling any animal

If you are selling an animal, a bill of sale document is a must. This contract will outline all the details of the terms of purchase, the health of the animal being sold, and how the transfer will transpire. A bill of sale serves as the proof of purchase that sellers and buyers can refer back to if necessary. Our bill of sale template includes necessary details like the who, what, when, where, and how much of the livestock sale.

Breeding any animal

If you are breeding horses, you need to have an airtight breeding contract. The breeding contract should outline the details of who is involved, time of breeding, fees and expenses, any guarantees (such as a live foal guarantee), rebreeding rights, liability clauses, etc. To protect yourself from liability, we recommend using our lawyer-drafted breeding contract template.

Transporting any animal for someone else

Just like the case of friends riding your horses, this is another big liability issue. In case of the many accidents that can occur while transporting a horse, (traffic accidents, theft, injuries, etc.), your equestrian business needs a contract for transporting animals for someone else. This will protect you and your business from being held liable if an unfortunate accident were to occur.

Employing anyone

If you are looking to hire for your horse farm or equestrian business, I suggest starting with this article: hiring for your horse farm. The employment contracts for your equestrian business will differ depending on what type of employee you are seeking. Check out this article to learn the difference between hiring employees and using independent contractors and which is right for your equestrian business.

What Contracts do Equestrian Businesses Need if People Are Coming onto a Property

This will apply mostly to horse farm owners, but if you are allowing anyone onto your property to ride horses, it’s wise to have them sign a liability release form. And remember, for riders under 18, a parent or guardian will have to sign the contract for them.

A liability release waiver is a document that will protect both the horse owner and the guest, as it lays out the risk that each party is taking on. As we know, horses, no matter how well-trained they are, are large animals with minds of their own, and accidents can happen.

Be aware of the equine activity statutes that apply in your state. These statues may require specific language for your liability release to hold up in court. Read more on how these statues might affect your farm here.

While your liability waiver is a must for protecting yourself, your equestrian business, and the people on your property, do what you can to prevent accidents. For tips on how to prepare riders (especially inexperienced ones) for riding your horses, check out Can I Let My Friend Ride My Horse?

Having warning signs on your property is another way to be proactive about protecting people on your property. These precautions also help you avoid legal liability. Read up on warning sign requirements here.

Do all these legal documents seem like overkill for a simple horse ride? We get it. But when it comes to protecting your equestrian business, contracts can save the day. Horses are powerful animals. That’s why we love them. But it’s also why we have to take necessary steps to protect ourselves and others when interacting with horses. Plus, having your guests sign a quick contract is worth the slightly awkward conversation as opposed to the expensive and time-consuming legal battles that accidents often involve.

Tips on how to use contracts for your equestrian businesses:

Have the correct person sign the agreement

While this may sound obvious, it is super important. And, it’s not always as straightforward as you might think. If you are entering into contracts with clients on behalf of your equestrian business, here’s how you should sign: Your name, your designation within the company (eg. owner, manager, etc.), LLC name

So let’s say your name is Mary Johannesson. Your title within the company is Founder, and your company name is Johannesson International LLC. You would then sign as follows: Mary Johannesson, Founder, Johannesson International LLC

If your client is signing the contract as an LLC, they should sign the contract in the same manner. (Name, designation, LLC name). If your client is entering the contract as an individual, they should simply sign with their legal name.

You or your client might want to have someone else sign on your behalf. For example, your client might have a specified employee sign off for them while they are unavailable. But is this allowed? The answer is yes, if they have taken the necessary measures.

For an agent to sign on behalf of the principal of a business, their permission to do so must be clearly indicated in the operating agreement or employment agreement of the business. You may also have someone sign on behalf of your business by including this permission in your own operating agreement, which you can update as necessary when employees come and go. 

Pay attention to who you are entering the contract with, because that is who you will be liable to. This will usually be your client, to whom you are providing services. However, imagine this scenario. You’ve opened a venue on your property and a couple has decided to have their wedding there. But the mother of the bride is the one paying for the venue.

So who should sign the contract? On the one hand, it’s the couple’s wedding. You want to take direction from them since it is their day. On the other hand, the mother is the one footing the bill. If she signs the contract, she will technically have the say on venue details, whether the couple agrees or not.

This is a difficult and awkward balance, but the recommended action is having the couple sign. That way, you are legally bound to their direction, and they are legally bound to pay you, whether that money comes from the mother of the bride or the couple themselves.

Make sure that your payment provisions are consistent throughout.

Contracts are especially important for outlining the details of payment (deposits, prices, time of payment, etc.) For your contracts to be enforceable, you need to make certain that the details of payment are consistent throughout your document. In other words, for you to pay someone or have someone pay you the rightful amount, details like payment, date of transaction, etc. need to be clearly and consistently outlined in your contract.

For more help on contracts with payment provisions, checkout our equine lawyer-drafted templates HERE.

Will your retainer fees hold up in court?

Speaking of payment provisions, let’s talk about retainer fees and deposits. If you charge 50% retainer fees or deposits, it may be time to stop. In summer 2020 a whole lot of contract disputes went to court over canceled weddings. Due to COVID cancellations, couples wanted their 50% deposits back. And most of those couples won over their wedding vendors. In order to have a payment provision that is upheld in court, a judge is generally looking for 3 things:

Was it clear to the client that:

• The deposit or retainer was nonrefundable;
• Why it was nonrefundable (do you literally spell this out?); and
• Was the amount reasonable?

50% at the time of signing is not a reasonable percentage to a judge in most instances. Let’s talk about what would happen if you ever had to defend your 50% deposit and contract in court.

A judge will ask you to explain in black and white (ie. an itemized spreadsheet) where you incurred 50% of the cost of the service at the time of signing. Or they’ll ask when you did 50% of the work to justify that amount. If you’re unable to do so, the judge is likely to side with your client.

Here’s what to do instead. If your retainer is less than 50%, you’re in a better negotiating position to allow for a refund, less the retainer amount. We suggest calling a deposit an “initial payment” and breaking down the cost of your services into a few payments. For example:

• If the contract you’re entering into is going to run for 9 to 12 months, we suggest charging four 25% payments.
• If the contract you’re entering into is going to run for 6 months, then three 33% payments would be the suggestion.

We also suggest adding a line to the beginning of the payments paragraph of your contract which states that ‘all payments are non-refundable and non-transferable.’ (Bold this line in your actual contract.) These steps will give you a better chance of keeping that nonrefundable retainer fee if clients fight for a refund.

Allow for amendments to your contracts

What do you do if dates, payments, or the scope of work change after you’ve signed the contract? You can make necessary, mutually agreed upon amendments to your contract, if your original contract included a provision for future amendments. 

Be sure to include a provision for amending the contract in the original document. That way you can make changes to the agreement when changes occur between your business and your clients. That way, you can draft an exhibit outlining the proposed amendment for your client to sign.

Include a risk of loss clause in your contract

This is an often-forgotten element of business contracts, but it is one that is important in maintaining client relationships. For example, if you’ve ever ordered something online, only for that item to not arrive, you’ve probably wondered who is going to pay for that replacement. You’ll probably start rehearsing your phone call to the company to fight for a refund or otherwise. In other words, when a good or service is not delivered to a customer, no matter the reason, there is typically a dispute about who is responsible for remedying the situation.

This is why I recommend a risk of loss clause in your client contracts. This section outlines where your liability ends and where that of your client begins. Making these terms clear at the outset of your customer transactions will help you and your client understand what risks are at stake. This avoids having to have that conversation with customers after loss has occurred and they are likely already angry.

Use contracts in your equestrian businesses to build client trust

For some, this may sound counterintuitive. Contracts feel very formal and may not build trust in the relational way you would typically think of. But can I suggest an alternative perspective? A well-written, thoroughly reviewed contract is a sign to your clients that they are working with a professional. And professionalism is a major factor for actually closing a deal with clients.

Think about it this way, the contract is what separates a potential customer from becoming your client. If a customer is not confident in the legitimacy or fairness of a contract, you are going to lose their trust. And for that matter, their business. My advice? Uphold professionalism in every aspect of your business, but especially with your contracts. Offer a well-drafted contract, invite their thoughts, negotiate terms fairly, and close the deal!

Conclusion

It is so important to have the right contracts for equestrian businesses. Without having the right contracts or using them incorrectly, you’re opening yourself and your business to a world of liability. Use these tips to help protect your livelihood and check out our lawyer-drafted templates for all your contract needs!

Mentioned in this article:

• How Equine Liability Waivers Protect Your Equestrian Business
• Can I Let My Friend Ride My Horse?
• How to Understand Equine Liability Laws and Activity Statutes
• How To Open a Venue on Your Property (Legally)
• Should You Board Your Friend’s Horses?
• An Equine Lawyer’s Tips for Horse Trailer Ride Shares

Read Next:

• Do You Need Equine Insurance For Your Horse?
• The Best Business Structure for Your Farm
• Horse Liability: An Owner’s Complete Guide