Loan agreements
STOP AND THINK!
Please read this section carefully. Not all loans go wrong, but many end in tears.
HORSE PATROL was developed after a loan agreement went horribly wrong and a network of deception was revealed (see missing horse ELIZA).
Although this is a lengthy read you must take advice - even mums and dads who have no idea about their child's new passion, please read on. We are here to help, if in doubt just pick up the phone.
We strongly advise you to make sure that the arrangement is properly drafted, ideally with the help of a specialist solicitor. We attach an agreement that is a useful starting point to make you and your solicitor think of some of the areas that could be contentious.
But first… some advice on the thorny question of loaning.
The British Horse Society's categorisation of types of loan agreement is a useful starting point for you to consider the type of loan that may apply to your arrangement:
- Standard loan - essentially one relating to a fit horse in good health which can be worked;
- Breeding loan - for example the borrower borrowing a brood mare to put in foal, with a view to the borrower then keeping the foal;
- Sharing - an agreement whereby the horse owner shares the use of the horse with another party - that party typically helping with the expense of keeping the horse and/or providing assistance in the form of carrying out certain duties e.g. mucking out, grooming etc.
- Working livery - the horse owner allows the livery yard/riding stables to use the horse and in return the horse owner pays reduced livery fees.
- Companion or permanent loan - typically used for an aged or unsound horse or pony the owner does not wish to keep himself (but does not actually wish to sell or destroy) - the loan being made with the intention the horse’s use will either be for light work only or frequently as companion to another horse.
It is obviously your judgment call whether you wish to loan your horse or pony, but if you are considering a loaning arrangement (any one of those listed above), it is sensible to do some groundwork, once you have decided that this is the route you wish to take.
If you are considering a loan scrutinise any applicants very carefully (and if you are advertising choose your words carefully to ensure that you are not attracting wrongdoers – “free to a good home” is asking for trouble). Always investigate the prospective loaner, obtain their address and landline number and ask for proof of residence (2 utility bills are ideal). If they resist be very suspicious. Contact local tack shops; vets; farriers and feed merchants to see if the prospective loaner is known to them – ask them to provide you references from an instructor. Genuine applicants will be pleased that you are taking such an active interest in your animal’s wellbeing. If horsewatch is active in the area ask them for input.
Once you are satisfied that the person is who they say they are, let them spend time with your equine and see how they handle him. Ensure the loaner has the right facilities and resources to keep the horse, and ensure that their riding ability matches your pony or horse – is the animal capable of carrying out the activities they intend to pursue? This is particularly the case if you are loaning on a companion basis. Visit the premises and make sure you are absolutely happy.
Whilst this may seem a lot of work, you are responsible for the well being of your equine friend and the more you ask of the prospective loaner the more likely you are to discourage dishonest wrongdoers.
AN AGREEMENT?
A verbal agreement is still an agreement but our experience is that law enforcement agencies are often reluctant to act unless there is a written agreement. Therefore always record the loaning arrangements in writing including the following:
- How long the loan is to last for;
- A description of the horse with a copy of the passport attached;
- Whether any fee is payable by the borrower;
- Insurance cover;
- Whether tack is included and a full description of any tack included
- Nature and extent of the use the borrower can put the horse to;
- If the horse is to be ridden, who is permitted to do so;
- Welfare responsibilities, including shoeing, worming, innoculations;
- Which vet is to be used, who is responsible for vets bills, the extent to which each party is to be consulted before veterinary treatment;
- Which farrier is to be used and who is to be responsible for the farrier bills;
- Rights of the owner to visit;
- Where is the horse to be kept;
- Requirements as to feeding, stabling and grazing;
- The documenting of any vices or unsoundness of the horse;
- An obligation on the parties to keep each other informed as to their contact addresses/telephone numbers
Below is an example of a loan agreement that you might find useful. This is illustrative only and is not a substitute for specific detailed legal advice on any loaning situation. To ensure maximum protection for you and your beloved equine, a loan agreement should be prepared by a solicitor and should be signed by the owner and borrower and should be dated and witnessed.
THIS AGREEMENT is made the [ ] day of [ ] 200 [ ]
BETWEEN
(1) [ ] (“the Owner”) of [ ],
telephone number [ ] (“the Owner”) of [ ],
and
(2) [ ] (“the Borrower”) of [ ],
telephone number [ ] (“the Owner”) of [ ],
1 DEFINITIONS
in this agreement:
(1.1)“the Horse” means a [ ] year old, [colour], [ ] hands [breed],[ sex] called [ ], registered with the [breed society] and Passport and ID number [ ] attached to this agreement at Schedule 1;
1.2 “the Term” means [ ] months from the date of this agreement;
1.3 “the Tack” means the saddle, bit and bridle, rugs and other equipment listed at Schedule 2; [Note: if you are selling tack specific provision needs to be made in order to negate any argument that the Borrower has paid for the horse]
1.4 “the Livery Yard” means [ ] Tel No. [ ] or any other suitable livery yard designated by the Owner;
1.5 “the Farrier” means [ ] Tel No. [ ];
1.6 “the Permitted Use” means to use the Horse for [ ];
1.7 “the Veterinary Practice” means [ ] Tel No. [ ];
1.8 “the Agreed Value” means [ ].
2 LOAN
The Owner agrees to lend the Horse and the Tack to the Borrower and the Borrower agrees to borrow the Horse and the tack for the Term [free of any rent] and will deliver the Horse’s Passport to the Borrower. [watch the HorsePatrol website as there is a move to allow owners to retain passports to enable them to secure the loan more fully]
3 ACCOMMODATION
3.1 The Borrower must keep the Horse at the Livery Yard, where she must keep it stabled and pastured as appropriate according to the seasons and weather. The Borrower must not move the Horse to any other place without the Owner’s written permission.
3.2 Without prejudice to the generality of the above, the Borrower is permitted to move the Horse for the purposes of travelling to competitions, training and veterinary treatment.
4 CARE AND ATTENTION
4.1 General Care
4.1.1 The Borrower must take good care of the Horse, give it plenty of love and attention and keep it properly fed and watered according to workload, and must keep it in not less than its present physical condition, as evidenced by the photograph attached to this agreement at Schedule 1.
4.1.2 The Borrower must feed the Horse supplements at the recommended feeding levels of [name specific feed and supplements].
4.1.3 [Are there special needs for bedding, soaked hay, stabling etc?] The Borrower will at all times ensure that the Horse is [insert stabled at night, requires restricted grazing].
4.1.4 The Borrower will at all times comply with all statutory provisions in relation to the horses including without prejudice to the generality of this provision the keeping of horses, the welfare of horses, the riding of horses and the transport of horses.
4.2 Health and Safety
4.2.1 The Borrower must arrange for the Farrier to attend the Horse every [5] weeks or at such other intervals the Farrier recommends.
4.2.2 The Borrower must keep the Horse on a rotational 6 to 8 week worming programme.
4.2.3 The Borrower will be responsible for all other necessary fees and expenses in connection with the Horse during the term including but not limited to [clipping etc].
4.2.4 The Borrower must maintain the Horse’s inoculation programme against flu and tetanus in accordance with normal veterinary practice.
4.2.5 If any veterinary treatment is required for the Horse including routine vaccinations and teeth rasping a veterinary surgeon from the Veterinary Practice should be called promptly, save for circumstances whereby the Horse is at a competition or outside the locality of the Veterinary Practice whereby a qualified veterinary surgeon from another practice should treat the Horse. The Borrower will notify the Owner if the Horse requires [any veterinary treatment] [veterinary treatment arising from serious injury or illness].
4.2.6. [Note anything here that the Borrower needs to know to safeguard both the horse’s health and wellbeing and his own – eg allergies, issues in traffic, hacking etc]
4.3 Vet’s Fees
4.4 Schooling and Competing
4.4.1 The Borrower must ensure that the Horse’s schooling is maintained at least to its present standard and that the Horse is not excessively competed [define].
[4.4.2 The Borrower will ensure that the Horse (with the Borrower) has not less than one hours tuition at each week of the Term (except for weeks of the Term which may be omitted) with [name] at the Livery Yard or elsewhere as agreed. The Borrower agrees that the Owner may contact the instructor for an objective view of the Horse’s wellbeing and treatment].
4.5 Tack
[4.5.1 If Tack is included, ensure this is clear - if you have sold the Tack to the Borrower make this clear here. If you have loaned the Tack to the Borrower make sure your requirements are listed here - maintenance, insurance, responsibility to repair / replacement].
4.5.2 The items listed at Schedule 2 are loaned to the Borrower, and the Borrower agrees that all items are in good working order and free from defect. The Borrower agrees that upon termination, for whatever reason, all equipment shall be returned to the Owner in good working order.
The Borrower must be responsible for all veterinary, farrier and other necessary fees and expenses in connection with the Horse during the Term.
5 USE
5.1 Restrictions on Use
5.1.2 [If the Horse is a Mare or a Stallion, consider whether option to use the animal for breeding should be allowed or forbidden - if allowed, consider the implications for (i) insurance; (ii) registering the progeny.]
5.1.1 The Borrower must use the Horse for the Permitted Use only, but not for Hire and Reward, racing in any of their forms or endurance riding [Polo, Horseball, Hunting or named activities] and must not lend the Horse to any other person or allow any other person, except a competent rider, to ride it without the Owner’s written permission.
6 INSURANCE
6.1 The Borrower must insure the Horse and the Tack in the joint names of the Borrower and the Owner for not less than the Agreed Value against all usual risk including death, loss of use, veterinary fees, death or injury of every person who at any time rides or handles the Horse and third party risks, and must pay all premiums to keep the insurance in force. For the avoidance of doubt, the Agreed Value will be paid to the Owner if a claim for loss of use of the Horse is made by the Parties [Note: Check with insurer who insures this Horse and ensure you notify the insurer of the intended loan arrangement]
6.2 The Borrower must not do or omit anything that could cause any insurance policy in relation to the Horse to become wholly or partly void or voidable.
6.3 The Borrower must produce to the Owner a copy of the policy of insurance on or before the Commencement of the Term.
6.4 In the event that the Borrower fails to insure the Horse and Tack the Borrower assumes full liability for any loss or damage including third party legal liability.
7 WARRANTY
7.1 The Owner owns the Horse free from encumbrances but otherwise gives no warranty of any kind about it and the Borrower must rely for all purposes exclusively on her trials and veterinary examination of the Horse.
7.2 the Borrower understands and agrees that horse-riding and care can be risky and at no time will the Owner be responsible for any act or omissions in relation to the Horse during the period of this Agreement.
8 ASSIGNMENT
8.1 The Borrower must not assign the benefit of this Agreement or part with the possession of the Horse save to return the Horse to the Owner.
8.2 This Agreement is personal to the Borrower and terminates automatically if the Borrower dies or lends, sells or in any other way parts with possession of the Horse or attempts to do so.
8.3 The Borrower agrees and confirms that she is not the registered or legal owner of the Horse and under no circumstances is she permitted to loan, lease or sell the Horse to any third party.
9 INDEMNITY
9.1 The Borrower must keep the Owner fully indemnified against all losses arising directly or indirectly out of:
(a) any non performance or non observance of the Borrower’s obligations under this Agreement; and
(b) the Borrower’s use and keeping of the Horse.
10 OWNER’S ACCESS
10.1 Visits and Riding
The Borrower must let the Owner visit the Horse at all reasonable times.
10.2 Access to Third Party’s Land
The Borrower must obtain consent for the Owner’s right of access to the Horse and the Tack during and on the termination of this agreement from all persons who have any interest in any property on which the Horse or the Tack is kept or to which it is taken.
11 OPERATIONS OR DESTRUCTION
The Borrower must not have the Horse operated on without consultation with the Owner or destroyed without the Owner’s written consent except in either case in the case of emergency and then only on the advice of a veterinary surgeon.
12 TERMINATION
12.1 Break Provision
Both parties have the right to determine this Agreement by serving not less than one month’s prior written notice provided that this clause should not prejudice any claim or right of action of either party in respect of antecedent breach of it’s covenants contained in this Agreement.
12.2 Default
The Owner may terminate the Loan and retake possession of the Horse and the Tack at any time if the Borrower fails to comply with the terms of this Agreement or if the Owner has reason to believe that he should do so in the interest of the health or wellbeing of the Horse.
12.3 Passport
Upon termination of his agreement for any reason, the Borrower shall return the Horse’s Passport to the Owner.
13 EFFECT OF TERMINATION
13.1 Livery Charges
The Borrower must without delay and at his expense return the Horse and the Tack to the Owner or such premises designated by the Owner and pay all charges for the full livery of the Horse and there for the balance of the Term if the loan is terminated before the end of the term:
13.1.1 by the Owner on the grounds of any material breach of this Agreement by the Borrower;
13.1.2 by the Owner for any reasonable cause (justified by veterinary or other expert opinion);or
13.1.3 by the Borrower for any reason.
13.2 Possession
At any time on or after the termination of this Agreement by either party, the Owner may at the cost of the Borrower retake possession of the Horse and the Tack and for that purpose enter any place at which they are or at which the Owner reasonably believes them to be.
14 DISPUTES
All disputes, differences and questions which at any time arise between the parties touching or arising out of or in respect of this Agreement or its subject matter shall be referred to a veterinarian as a single arbitrator.
15 GENERAL
15.1 Entire agreement
This agreement constitutes the whole agreement between the parties and supersedes all previous agreements between the parties relating to its subject matter. Each party acknowledges that, in entering into this agreement, it has not relied on, and shall have no right or remedy in respect of, any statement, representation, assurance or warranty (whether made negligently or innocently) other than as expressly set out in this agreement.
15.2 Interpretation
A reference to one gender shall include a reference to the other genders
Signed by the Owner ..........................
Witness ..........................
[Name and Address]
Signed by the Borrower ........................
Witness ........................
[Name and Address]
SCHEDULE 1
* Copy Passport
* Photographs of loaned horse – both winter and summer coat
* Photograph’s of Borrower
SCHEDULE 2
* Schedule of Tack loaned and value
in £.
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