Article Published in Horse Breeder Magazine, Winter 1990

"Breeding Contracts and Breeding Trouble" by R. Lar Thomas

As owners begin to dream of fortunes to be made by breeding their best brood mares or standing their first stallion, the time comes when certain questions must be asked. The simplest of these questions such as who, what, when, where, why and for how much, can present some complex problems.


Set Out Terms

These questions seem easy enough to answer at the outset, but difficulties arise when it comes time to pay the stud fee or pick up your mare. Was it $100.00 at service and $200.00 later? Was a guaranteed live foal agreed to? What is a live foal? What if she didn't settle? Who pays for boarding my mare? The list goes on and on.


The important thing to realize is that what you think is not necessarily what the other guy thinks you think. Confusing? It can be. Whenever two or more people are trying to reach and "agreement" always set out the terms in writing. It will avoid a great deal of unnecessary confusion later.


Disputes

It is more difficult to dispute written contracts that is is the spoken word. They are also easier to enforce. In addition, a written contract gives the parties something tangible to refer to. Getting your breeding contract in writing may be a little inconvenient now but it could spare you a cussing contest in the future.


If there is a dispute or misunderstanding, having everything written down gives both parties equal footing to resolve these matters. New Mexico, as with most states, recognizes that if there is a writing intended as a final expression of the terms agreed to that those terms may not be contradicted. These written terms, however, may be explained or supplemented if need be. There is no foolproof way to cover every situation that may arise, but if you cover enough bases it will be easier to protect your interests.


Contract Basics

A simple contract can alleviate most headaches associated with a "meeting of the minds." Broken down to basics a contract consists of an offer, an acceptance, and consideration. These terms are generally defined as follows:

  1. An offer is a commitment having definite terms communicated to another person.

  2. The acceptance comes if the person to whom the offer was made communicates to the person making the offer that he agrees to those particular terms.

  3. Consideration is whatever is paid to induce on to perform on the contract. It may be in the form of money, but it can be something different like goods or services.

So, what we have with a contract is essentially a promise for a promise. I promise to breed my stallion to your mare, you promise to pay me $500.00 for this service.


Definitions

The big problems begin to surface when the little ones do. It is the little "what ifs?" that will get you. Define the terms of your contract as plainly and as unambiguous as possible. What if their stud breaks down? What if their mare gets sick? What if they want the whole fee up front and that's not what you had in mind?


A good rule of thumb is to make sure you always include definitions of terms that don't have plain meanings. To decide on appropriate definitions ask yourself who, what, when, where, and why for each of these terms. For example:


Live Foal: a living, breathing foal of either gender that is delivered, within 345 days after completion of service. Any foal that lives more than two hours after parturition will be deemed a live foal.


Bred Back: owners will have the privilege of having the same or any other approved mare serviced next season by the same or any other agreed on stud for no additional charge to them should their mare not prove with foal.


Another way to define terms is to do it within the text of the contract. A couple of examples here are provisions for payment and for boarding a mare:


... the stud fee will be due and payable as follows: one-half paid at time of service or before mare is removed from the property and the remaining one-half to be paid after a live foal is born of this service...


... any owner that leaves a mare on the premises more than twenty-four hours after completion of service will be charged for boarding at the average rate in effect that the time...


Remember, definitions can be custom tailored to fit your own needs. You do not need Webster's version to have an enforceable contract. Any definition that is agreed to is valid.


List Your Wants

It is probably wise to prepare a list of your expectations before entering into a breeding contract. Take this list and compare it to the terms outlined in the contract if one is provided. Do you agree to everything? If you are not completely satisfied, do not enter into the contract.


On the other hand, if both sides can live with the terms, chances are you both know what the other is thinking and it may be reasonable to enter into this contract.


Safekeeping

When you do reach an agreement and it's been reduced to writing don't throw it on the seat of your pick-up and forget about it. Make a copy and keep it separate from the original. I can't remember all the times I have put important documents in places where I would be sure to find them at a later date. keep the copy with your barn record and the original in a different filing place. You will praise yourself later for being so wise.


Negotiating a breeding contract may not be as exciting as getting the new foal, but it can give on new insight on a lot of issues that often go unnoticed until somebody says "What if?" Protect yourself and your investments by putting things in writing. Time causes all memories to fade. What you think the agreement is this summer may not be what it was last summer.