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Bad Idea – Using Internet Contract Forms

Tempted to save time and money by using an Internet contract form in your horse business? Here is what Jennifer Goddard, owner of a twenty-six stall barn, Levaland Farm, Middleboro, MA, had to say recently on this topic. "Some of my boarders were talking one day about getting their own barn and using forms from the Internet for their boarding agreements and their waivers. I took a look at what one boarder said she was going to use, which was posted on an Internet chat site. It was completely inappropriate for what she wanted to do. The form totally went against her, made it impossible to conduct business, and she didn't even know it", Goddard said.

Goddard has some basis for her opinion. Although going to court to collect board fees is not a barn owner's favorite pastime, it is sometimes necessary. Goddard has been twice — and both times, her contract held up in court.

"I would never get a form off of the Internet to use," Goddard emphasized. "You're just asking for trouble."

A survey of common form documents, such as board agreements and sale contracts on the Internet, bears this observation out. Several Internet sites offer forms for free, sometimes even forms that have been prepared by an equine lawyer. Other sites have sample contracts used by the business itself, and which reference the practices of THAT business in THAT state. A horse or stable owner might surely be tempted to cut and paste these offerings, and then start editing away on their own home-grown contract in an effort to save time and money, despite clear warnings from the form sites that expert advice should always be sought.

The problem is this: even forms prepared by equine lawyers and left for public consumption, bear reference (whether overtly or not) to the framework of the law that exists in the state that that lawyer practices in — and contract law is one of the most heavily regulated and fastest moving of all areas of the law. Contract law reflects the fast moving nature of business and business practices, with frequent updates and individual local court practices. Contract law reflects the economy: in tough times, weak contracts fall to the wayside. Contracts also must be individually crafted for the unique nature of the business itself, with different provisions invoking different features of the state's legal background.

Though all states have made an effort to use a uniform commercial code, even the uniform provisions in each state have grown their own jungle of differently-interpreted cases having a direct effect on the contracts used in those states. Finally, with regards to equine law, the statutory language used by each state that covers common horse-related concerns is often different in each state.

Non-attorneys who use a form document without reference to their own state's regulatory or statutory framework, or the common law of that state, will therefore wind up with a document that can be essentially meaningless.

For example, one area of the law that boarding stables often seek to describe is a lien provision on the horse that is boarded in the stable, as security for the board fees that need to be paid. Some states have in place a lien provision in a state statute that specifically covers the horse-boarding-fee lien. If the contract does not reference that statute, then the contract may not say what the parties think it says, and it may be enforced in a manner that neither party contemplated, or worse, where the contract references a statute from another state. In that case, the parties may not be able to enforce any part of the contract. But even if there is no existing state statute on boarding fee liens, the common law of the state will often require certain actions to be performed for enforcement of debtor-creditor situations, which a non-lawyer would have no inkling about.

Another common example is the equine liability statute common to many states. Each state has an individual view of the propensity of equines to harm participants in the sport: some states view the likelihood of injury occurring as to be so nearly unavoidable that injured parties have almost no chance of recovering against even the grossly negligent, no matter what the language of any waiver used or not used. Sometimes the state has that view, BUT ONLY if the statutory forms are obeyed to the letter of the law. In that case, the language of the waiver of liability that is signed will be crucial in the case of any injury. In other states, the view [sometimes clearly stated, as in the case of the Vermont statute, for example] is that equine sports deserve the same protections as the participants of any other sport or activity. In that case, even with a waiver signed by the injured person, if the responsible party was negligent and that negligence causes injury, then the responsible party will still be liable. In other words, ordinary negligence is NOT protected by the equine liability statute and cannot be waived.

Still other states, through the common law or in the statute itself, have carved out exceptions including situations such as faulty tack (as being the duty of the instructor/owner to oversee) and dangerous conditions on the premises. In that case, the liability waiver should be crafted to the law of that state, so as to include language that would cover the individual circumstances of that barn. As another example, equine insurance often requires different kinds of actions from the insured, e.g. in the area of notice. If the contracts that the insured signs with third parties do not take into account the insured's duties to maintain their insurance, then the insured could unwittingly contribute to the defeat of their own insurance policy. This result hardly bears thinking about.

As the foregoing shows, the legal consequences of signing a contract are serious enough so that even Dena Paolino-Sarcia, owner of La Stalla Rosa Family Horse Farm in North Attleborough, MA, who is a Rhode Island-Massachusetts lawyer and recently bought her own barn, decided to avoid using the "Internet contract" for her new business. "I took a look at what was out there, and I just didn't feel comfortable with doing my own contract on this; my legal experience is in criminal law. The stakes are just too high for me and my family."

Using an Internet contract without expert advice is a losing proposition. Gambling should be confined to the track, and risk to the athletics of riding. Neither has a place in business. That's just good horse sense.

Kathleen A. Reagan, Esq. is an equine attorney practicing in Braintree, MA, available at www.kathleenreaganlaw.com, has developed a course in equine law at www.concordlawschool.com, and is co-founder and Vice President of QueryHorse, the largest horse information resource on the Internet.

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