We all know that record keeping is important for tax purposes, as well as for keeping track of day-to-day developments in one’s horse activities – whether in racing or breeding. One area that is often neglected, however, pertains to written contracts with trainers.
Written contracts are important with trainers not only to protect the parties from unexpected legal liability, but also to provide documentary evidence in the case of an IRS audit. Auditors will ask to see business records associated with the horse venture, and often revenue agents find it incomprehensible that anyone involved in the horse business would not have written contracts with trainers.
The contract should make it clear that the trainer is undertaking the training of the animals listed in the agreement and/or to educate the owner on how to train them. The agreement should specify the terms and conditions of payment, and what incidental services, like boarding, grooming, labor, transportation, veterinary expenses, etc., that might involve additional charges.
The horses to be trained should be listed, with the name of the current insurer, if applicable, the insurer’s emergency phone number, a disclosure of the horse’s vices or unique habits, and other pertinent information.
Under state laws, the trainer can impose a livestock lien to enforce unpaid boarding costs, and this fact should be mentioned in the contract. Enforcement of a lien for unpaid bills, however, is an undesirable last resort, and involves filing a case in court, with associated legal fees and delays.
The contract should have language specifying that the trainer will perform all services in accordance with generally accepted professional standards, and that the trainer will exercise reasonable care for the protection of the horses, and will educate and train the horses and/or owners to the best of his or her ability. There should be a clause pertaining to routine horse care requirements, or special needs.
For the trainer, the contract will set forth an “assumption of risk” clause to make it clear that he or she is not liable for injury to or the death of a participant in equine activities resulting in the inherent risks of equine activities.
To avoid any misunderstanding, the contract should state that the trainer cannot and does not guarantee or predict the success of the training program, since this depends somewhat on the individual physical and mental ability of each horse.
Trainers will always want a statement that each horse will be delivered to the trainer’s facility free from transmissible diseases, and must be effectively wormed, and have current immunizations prior to arrival.
Trainers usually want the right to terminate the agreement on short notice for any reason, including the animals' poor health or unsoundness, dangerous propensities, or other conditions that make the horse unsuitable for training. Likewise, the agreement should state that the owner may terminate the agreement for any reason.
There should be a clause authorizing the trainer to obtain emergency care if the trainer is unable to contact the owner.
Another important clause desired by trainers is a statement that the trainer will not be liable for any sickness, disease, theft, death or injury arising out of the boarding or training of the animal except in the event of willful negligence.
It is important to ascertain whether the trainer has public liability, accidental injury, theft or equine mortality insurance that might pertain to horses boarded at his or her stable.
You should retain signed copies of the agreement (not blank copies), for if you are audited the revenue agent will want to see them.
For racehorse contracts the trainer may be designated as an authorized agent with authority to decide which races to enter, including claiming races, and which jockey shall ride the horse. There should be provision for the owner to have the right to require another jockey or his choice, and the option to withdraw the horse from or not enter it in a particular race, or to direct the trainer to enter the horse in a particular race.
For show horses, the contract should make it clear whether the trainer has discretion to have the horse shown at horse shows of his or her choice, or whether this is something to be mutually agreed upon.
According to attorney Michael Dorazio, Jr., of Rancho Santa Fe, California, “It is important to put into the contract exactly what the specific responsibilities of the trainer are. Is he expected to get the horse ready at shows, to cool down the horse and put it away after training sessions?” He adds, “How often is the trainer to ride the horse – how many hours/days per week? It’s important to have communication between owner and trainer because this can bring issues to the surface before problems arise.”
I recommend a clause that obligates the trainer to provide reports (monthly) on the general well-being of the horse and progress in its training.
While many owners do not have contracts with their trainers, this is something that is very important for both parties, and can help the parties think about the issues and avert conflicts in the future.
John Alan Cohan is a lawyer who has served the horse, livestock and farming industries since l98l. He has clients in all 50 states. He can be reached at (3l0) 278-0203, or by e-mail at firstname.lastname@example.org. See more info on his website, www.JohnAlanCohan.com.