Equine Law FAQ

What is Equine Law?

Equine Law includes all aspects of the equine industry outlined on the Equine Law Services page of our website.

Who needs an Equine Lawyer?

The answer is probably anybody who is involved in the decisions of a horse that may have some financial consequences of significance or may affect the well-being of a horse. The problem of course is the cost/benefit. Lawyers are expensive, and you do not need to run to lawyer every time there’s a problem, but certain times, not running to an equine lawyer could end up being more expensive then had you gone to a lawyer in the first place. Frequently we will say to clients who come to us with problems, “Five minutes,” and they say, “What do you mean, ‘five minutes’?” My answer is had you spoken to us for five minutes this terrible mess that you find yourself in and would never have happened. So much like medicine, prevention can be the best cure. Speaking to an equine lawyer before you get involved in any kind of a financial decision of any significance regarding your horse or your horse related business with the welfare of your horse just speak to an equine lawyer. EquiLaw offers complimentary consultations, so you can best understand your equine legal situation and then YOU can decide whether not you need an equine lawyer.

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How can I protect myself from being sued?

An equine lawyer can help avoid many potential problems horse owners or equestrians may face. It is important to find an equine attorney to help draft documents to protect your self and your investment. An equine attorney can also help guide you through finding a comprehensive insurance policy to help protect you and your horses.

Do Equine Activity Liability signs really protect an equine business?

Any person horseback riding on your property must sign a liability release waiver. General waivers can be found online at no cost. There are also online equine lawyer agencies that offer them for a small fee. Feel free to contact EquiLaw to ensure you include all details in your waiver. Make sure that all parties sign the waiver. For your protection, any business arrangements should be written down and signed by all participating parties.

How important are liability release waivers?

By law, facilities who host any equine activities are required to post those signs. If you do not post them, then you are not protected. There is specific language written in the New Jersey Equine Activities Liability Act, which requires the signs to be posted and provides the exact language the signs must contain. If the sign is posted, you are covered. If you have any questions about your liability, feel free to contact us for any and all legal strategies and solutions.

Where can I get free templates for boarding, leasing, or selling a horse?

While there are websites that offer templates at little or no cost, one runs the risk of liability and loopholes. To be sure you are completely protected, it is wise to have an equine attorney review any document you plan to sign or ask a client to sign. Though this will cost a little extra time and money up front, it can help preserve your horse’s welfare, save you countless hours, and save you substantially more money in the future. We offer legal strategies and solutions that can save you time, money, and heartache in the future.

What is horse syndication?

The syndication of a sport horse or a race horse is a relatively simple concept. Essentially, individuals or businesses come together and pool their limited financial resources and by doing so are able to purchase, train, care for, show, race, or breed a horse that individually they could not do on their own. The concept of syndication is not a legal term, but rather a business term to describe various forms of co-ownership for a common purpose. Each of the participants, or “members”, own a percentage of the sport horse or racehorse, usually referred to as a “fractional interest” and pays for a percentage of all expenses and earns a percentage of all winnings or stud fees in accordance with the amount of fractional interest they own. The exposure–or risk–is limited to the size of the fractional interest a participant may own, but the percentage of the purses and stud fees the horse might earn is limited by the same fractional interest.

What is the purpose of equine syndication?

There are several reasons why a syndication would be created to own a sport horse, race horse, be it a Thoroughbred or Standardbred. The first, and most obvious is for the thrill. On the racing side, owners are usually hopeful of the potential financial gain of owning a successful racehorse. A fractional 10% investment of $25,000 may lead career purses of $2 million–of which the 10% owner would realize the gross amount, less expenses, of $200,000.00 for his $25,000.00 investment. The second reason one might participate in a racing syndication is to own a fractional interest in a breeding stallion, and by doing so, have the right to have mares breed to that stallion. Stud fees can range from a few hundred dollars to in excess of $100,000.

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How is a syndication created?

There are many ways to create a horse syndication. Some syndications are very simple, and some of them are very complicated. The simplest creation of a syndication is a group of people (could be 4 or 5 or maybe even less) who come together and agree to share in the expenses and the ownership of the horse. The syndication can be created in an informal manner, though it is not encouraged. A syndication should be done through the creation of an entity (it’s normally a limited liability company) and with the help of an equine lawyer. Each of the individuals owns a membership interest in the entity, and they participate through the amount of percentage of interest they have in the entity in the ownership of the horse and the benefits that arrive. That’s to put it the simplest way. When one gets into the racing industry, and into significant racehorses–especially breeding stallions–the entity can become very complicated. An equine attorney can offer advice on how to keep even a complicated horse syndication as simple as possible for all the participants, and help protect their interests and investment.

Why do syndicates need a lawyer?

An equine lawyer can help in drafting a syndication agreement will detail the rights and obligations of the members to each other and to the syndication. This can help protect the rights of the members of the syndicate and the syndicate manager. The other issues addressed by the syndication agreement will be the number of fractional interests sold, how income and expenses will be allocated, who maintains the records, and what information will be provided to the members. A critical aspect is the right of a member to sell their fractional interest, and whether or not the other members will have a right of first refusal before a member can sell their interest to an outsider.

What if some of the syndication shares are not sold?

That normally occurs in a more complicated syndication. In the case of the simplest syndications, normally the group of people who are interested in acquiring a horse (whether it be a sport horse or racehorse) have already decided they want to participate, so the group is already formed. If you have a larger syndication where a significant number of shares have to be sold the offering documents will state that if a certain minimum number of shares are not sold the syndication will not go forward. In that case, those who have invested or put their money into the syndication will receive the return of their money in almost all cases and the syndication just does not occur.

How does a syndication dissolve?

Well it depends on the reason for its dissolution. If the case is the horse is sold, then obviously the purpose of the syndication no longer exists; however, the syndication may want an equine lawyer to draw up the horse’s bill of sale. The proceeds of the sale of the horse would be distributed to the participants of the syndication in proportion to their fractional interest. The legal dissolution of the entity which had created the syndication–whether it is in limited liability company or corporation or partnership–would be left to the lawyers, but the way it still might dissolve could be through a distribution of the assets which are held by the syndication to the participants in accordance with their interest in the syndication rather.

What is a breeding contract and why would someone need one?

A breeding contract, often than not, is in connection with the breeding of a racehorse Thoroughbred or Standard bred stallion whereby an owner of a mare presents their mare to the owners of the stallion for the purposes of breeding, and having a foal come out of the breeding of the mare and the stallion. So one, if you are on either part of that transaction either the breeding stallion’s owners or the mare you enter into a contract as to the terms and conditions between the parties. Having an equine lawyer review this contract ahead of time can save participants from many potential issues that could arise in the future, and can help safeguard your investment.

More often than not, in the racing industry, and in all sports for that matter including sport horses, the contract is contingent of the payment is contingent on a live foal. A breeding contract for a standard bred or thoroughbred racehorse the stud can be as little as $500 to $25,000 or more, again depending upon the breeding stallion and the successes he has had both as a racehorse and obviously in creating and generating offspring who have been successful on the track. A contract is entered into between the owner of the stallion and the owner of the mare for the breeding of the mare to the stallion with the understanding that there is a stud fee paid, and the stud fee is due when the mare gives birth to the foal and the foal is live and is usually paid by the owner of the mare. (Which would be 11 months after the breeding has occurred.) In the Standard bred industry, there is a limitation on the number of breedings that a stallion can breed to (which is 144) as governed by the United States Trotting Association.

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Why would stallion owners need an equine lawyer?

A well regarded stallion will breed between 75 to 100 coverings–between 75 to 100 mares in a season. The superstars will cover even more than that. But there’s always a contract between the two parties determining their rights and their obligations to each other with respect for the breeding of the mare to the stallion for the purposes of producing a foal. So it is essential, once again, that the agreement be reviewed or drawn up by an equine attorney; otherwise, you can face a whole host of problems that could have been easily avoided.