Example Loan Agreement

Transcription

1 Practical Horse Law: A Guide for Owners and Riders Brenda Gilligan Copyright 2002 by Blackwell Publishing Appendix 1 Example Loan Agreement This is an example of a loan agreement entered into by two imaginary parties,reflecting what they have agreed between them. Your own loan agreement may have different clauses and details. The important point is to draw up a document that both parties agree to and are happy to comply with. One party may have greater bargaining power than the other and there may have to be some element of compromise ± it will depend on how much you want to loan or loan out this particular horse. If instinct tells you it really is not going to work ± for instance as the loanee you find yourself in disagreement over almost everything the owner wants,or as the owner the loanee just doesn't seem knowledgeable enough ± then it is probably best not to go ahead. Hopefully the process of trying to draw up a suitable agreement will expose any problems at an early stage. This example is for guidance only. You are strongly advised to take independent legal advice before entering into any type of agreement or arrangement. (Text in italic indicates points to consider or alternatives.) Agreement for Loan of Horse This Agreement is made between: of... and (`the Owner') of... (`the Loanee') in respect of and in consideration of the loan by the Owner to the Loanee of the horse... described below for the purpose of 205

2 206 Appendix 1 This Agreement is an Agreement for Loan and shall not be interpreted or construed as an Agreement for any other purpose. The loan shall be for a period of..... (`the loan period'). (Do you want an option for the loanee to renew? On the same or different terms? Do you want an option for the loanee to have first refusal if the horse is to be sold?) Prior to commencement of the loan period,there will be a probationary period of 28 days subject to the terms and conditions of this agreement and if after expiry of this probationary period,or earlier by mutual agreement of the Owner and the Loanee,the horse has proved suitable in the opinion of the Loanee,for the purpose of the loan,then the loan period will commence. (You may not need this) If the horse does not prove suitable,in the Loanee's opinion,then the Loanee will return the horse to the Owner during the probationary period at his or her expense. (Or at the Owner's expense, whichever is agreed). The Loanee's opinion will be final. The (here put in any other document which you want to become part of the terms of the Agreement)... shall form part of the Agreement. The Probationary Period will commence on: The Loan Period will commence on The loan will terminate as follows: a) Upon either party giving... days notice in writing/by telephone to the other,such notice to take effect from the second day after the date of the notice if in writing or immediately if by telephone. or b) Immediately if either party is in breach of any of the terms and conditions of this agreement,save that if the breach is capable of remedy,either party can require the other to remedy any such breach by giving written notice of the breach,the action required to remedy it and the time by which the action must be performed. If the breach is so remedied,then the agreement will resume from that point. or c) At the end of the specified loan period if any without the need for any further notice.

3 Example Loan Agreement 207 or d) As may be specified in this agreement on the occurrence of a specific event. The Loanee shall be responsible for transporting the horse back to the Owner on termination and for the costs involved however termination occurs. or Upon termination,under a) and d) the horse shall be removed by the Owner on the date specified in any notice or as set out in the Agreement or within 48 hours if under b) or c). If the horse is not so removed then the Loanee reserves the right to charge for livery at.... per day, payable before the horse is removed. The Horse (Attach photos from front, back and both sides) Name:... Age:..... Height:... Sex: Breed:... Breed Reg. No: Freeze mark: Colour and description:..... Any other identifying marks..... The horse... known as ` 'isasdescribed above and is warranted sound,free from any stable vices or other habits, good to box,shoe,clip,catch and in traffic,of good temperament to handle and ride and suitable for the purpose of the loan save as set out below: The Owner warrants that he/she has hereby disclosed all known unsoundnesses,pre-existing health and/or dental conditions,vices, defects,habits or specific characteristics of the horse to the best of his/her

4 208 Appendix 1 knowledge and belief and the Loanee is taken to accept the horse with those so disclosed as above but with no other. The Loanee reserves the right to require the Owner to remove the horse at any time at the Owner's expense should the horse prove not to be as described above and in particular if it is unsound,has one or more vices, is carrying any infectious disease or illness,or is,or becomes dangerous, in the opinion of the Loanee,to ride or handle. Tack and Equipment The horse is loaned with tack and equipment as set out below: (Itemise each piece and give a description of it together with an agreed assessment of its condition. Attach photos if required.) Such tack and equipment is and remains the property of the Owner and will be returned to the Owner at the termination of the loan in the same condition as far as possible,fair wear and tear excepted. Where return is not possible,due to loss,damage or the item wearing out,then a replacement item of the same or similar quality and value if purchased new should be provided by the Loanee on return. All additional items purchased by the Loanee during the period of the loan not by way of replacement shall remain the property of the Loanee. The Loanee will not insure any tack or equipment while it is in his/her possession under this agreement and if the Owner requires insurance cover for the tack and equipment then he/she must make their own arrangements,except that the Loanee will not be responsible for the provision or cost of any modifications to the premises where the horse is kept and/or systems necessary to comply with the terms of any policy and the cost of the same will be the responsibility of the Owner nor will the Loanee allow any modifications which in the Loanee's absolute discretion are deemed unreasonable and/or unreasonably required by the Owner even where this means that the terms of any policy cannot then be complied with.

5 Example Loan Agreement 209 For the avoidance of doubt,the Owner should obtain details of any policy requirements before taking out any policy and obtain express prior agreement to the terms of the policy from the Loanee. The Loanee agrees with the Owner that in consideration of the Owner loaning the horse under this agreement he/she will: 1. Use the horse only for the purposes of the loan (or for the purpose of...) and that the horse shall only be ridden and managed by... (and/or their agents or staff, and/or such outside instructors as shall be from time to time employed by the Loanee for teaching purposes. The horse will be used at the discretion of...,but is unlikely to be required to work in excess of...per day on...days of the week. Consider competing ± who gets the prize money, who pays for entry fees, etc., will the owner not want the horse taken beyond a certain level? If the purpose is for breeding, the terms of this agreement are unlikely to be suitable and a specific agreement should be drawn up. Is the Loanee willing to allow the owner to retain some riding rights? This can cause problems ± what if both want to ride at the same time? What if the horse is injured while the owner is riding such that the loanee cannot use it for a considerable time? Who would pay for vet's bills in those circumstances? Could the Loanee terminate the loan?) 2. Keep the horse at... orsuchother premises as are appropriate at the discretion of the Loanee save that the Owner will be given... days notice of any new address except in an emergency when the Owner will be notified as soon as possible. 3. Be responsible for all the horse's day to day care,including the provision of an adequate diet,stabling,bedding and grazing and take all reasonable care to maintain the horse in good condition,and for all costs involved in doing so. (Specify any particular feed/bedding/other regimes if required. Who will be responsible for the cost of unusual or particularly expensive feed, supplements, bedding etc? Is the Loanee at liberty to change the horse's diet if he/she sees fit?) 4. Have the horse regularly and appropriately shod by a suitably qualified farrier of the Loanee's choice at the Loanee's expense. 5. Keep the horse regularly and appropriately vaccinated and wormed according to the Loanee's programme and keep a record of the same, the cost of vaccinations and wormers to be met by the Loanee. 6. Ensure the provision of appropriate tack and equipment if not provided with the horse,at the Loanee's expense,but all and any such tack or equipment purchased by the Loanee for the horse shall remain

6 210 Appendix 1 the property of the Loanee at all times and will not go with the horse on return. (Consider whether the tack and equipment to be loaned with the horse is suitable, or whether the Loanee would prefer to buy their own in any case and keep it at the end of the loan period. Consider what to do about expensive items such as saddles, for example the Loanee will not want to return a nearly new 1500 dressage saddle as a replacement for an elderly general purpose saddle that came with the horse.) 7. Provide proper and appropriate veterinary care and treatment by a veterinary surgeon and veterinary practice of the Loanee's choice as necessary on the following conditions: a) The Loanee will be responsible for the full cost of veterinary or dental treatment for any illness,injury or disease caused by the negligence of the Loanee during the period of the loan to the extent that it is not covered by insurance,provided that the treatment is recommended on veterinary advice by a veterinary surgeon retained by the Loanee. Where the veterinary advice is that the horse should be humanely destroyed whether on economic or humane grounds,then the Loanee reserves the right to refuse to meet the cost of any veterinary care or treatment beyond that advice and if the Owner wishes further treatment, then he/she must be responsible for the cost and for the cost of any livery,feed,bedding,shoes,wormer,vaccinations etc.,whilst the horse is unfit for the purpose of the loan but still in the care of the Loanee. The Loanee shall not require any personal payment for his/her care of the horse during such time should it be the Loanee's decision to continue caring for the horse up to a period of...but thereafter will require either that the horse be taken back by the Owner or that the Owner pay for the care of the horse at a rate of..... (or whatever is the current livery rate at the time) but for no longer than after which the horse must be taken back by the Owner. In the event of the horse's death while in the care of the Loanee,the Loanee will only offer compensation for the value of the horse where the horse is not insured for the same and where the horse's death has been caused by the Loanee's negligence and there is veterinary confirmation of that negligence. The amount of compensation will be

7 Example Loan Agreement 211 thesumof... agreed between the parties to this agreement or the value of the horse on the open market immediately prior to its death as evidenced and confirmed in writing by... (for instance, a reputable dealer in that type of animal or a reputable local dealer) b) The Loanee will otherwise be responsible for the cost of veterinary or dental care up to the value of...for any illness,injury or disease not caused by the negligence of the Loanee where this is not covered by insurance during the period of the loan for any one incident but not for more than any... separate incidences in any... month period. Any costs over and above this sum must be borne by the Owner. c) If the horse is diagnosed with an illness,disease or injury which is likely to be permanent or recurring on a regular basis and which is or is likely to render the horse unfit for the purpose of this loan then the Loanee reserves the right to return the horse to the Owner as soon as possible after such diagnosis and to require it to be moved from the Loanee's premises within... days of such diagnosis at the Owner's expense. d) The Loanee will not meet the cost of veterinary or dental care and treatment for the pre-existing condition/s of...or any pre-existing condition not disclosed to them by the Owner. e) The Loanee will not meet the cost of veterinary or dental care where the veterinary or dental advice is that such treatment or care is uneconomic and/or unlikely to benefit the horse. f) Although reasonable efforts will be made where possible to contact the Owner,the Loanee reserves the right to have the horse humanely destroyed or surgery performed on veterinary advice without obtaining the express prior permission of the Owner in an emergency and/or where the horse is suffering. In non-emergency cases,where destruction or surgery is advised,reasonable efforts will be made to contact the Owner and obtain permission,but the Loanee reserves the right to have surgery performed and/or the horse

8 212 Appendix 1 destroyed after......days or sooner on veterinary advice if the Owner cannot be contacted. The Loanee will be responsible for the cost of disposal of the body should the horse be destroyed but reserves the right to do this by the most economic means. (Otherwise note any specific requirements ± e.g. cremation, putting down by injection and who will be responsible for the cost.) 8. Be responsible for the horse's care while travelling during the period of the loan where this is arranged by the Loanee but will not be responsible for the horse's welfare to and from the Loanee at the start and termination of the loan period unless specifically organised by the Loanee nor while the horse is being transported under arrangements made by the Owner. 9. Allow the Owner access at all reasonable times to the horse on the Owner giving at least... hours notice to Not sell,attempt to sell or enter into any agreement to sell the horse during the period of the loan,nor loan the horse to any other person or persons,authorities or bodies without the prior written permission and the full knowledge of the Owner. 11. At all times treat the horse with patience and kindness and not require it to perform beyond its reasonable capabilities in the discretion of the Loanee. And the Owner agrees that in consideration of the same,he/she will: 1. Accept the terms of and the responsibilities,financial or otherwise,as set out in this Agreement. 2. (Any other specific responsibilities of the Owner if not mentioned under any other heading.) 3. Give the Loanee quiet enjoyment of the horse under this Agreement. Arbitration The Loanee and the Owner agree that any disputes or complaints arising with regard to the horse during the period of the loan whether arising out of the terms and conditions of this agreement or otherwise which cannot be resolved to both parties' satisfaction by first raising the matter with... in writing within...days of the dispute or complaints arising,specifying the grounds of the dispute or complaint and specifying the remedy required,shall be referred to

9 Example Loan Agreement 213 (nominated by the party requesting arbitration. If the other party objects, he or she must do so in writing within 7 days of being notified either by telephone or in writing of the nomination or the nomination stands. If an arbitrator is not agreed an arbitrator shall be appointed by ) as sole arbitrator(s) for arbitration and decision,such decision to be accepted as final and binding by and on both parties. The arbitrator's fees and expenses shall be borne in equal shares by the parties who shall have no other claim against each other whatsoever in respect of those fees or expenses,otherwise each party shall be responsible for their own costs of such arbitration and decision. N.B. You may lose your right to take Court action by agreeing to Arbitration We understand and agree to the terms and conditions of this loan agreement as set out above and agree that it contains the entire terms of the agreement,superseding and replacing any prior oral or written communications between the Loanee and the Owner. (Witnesses should be independent and unconnected to the Agreement.) Signed... Owner Print name... Dated.... Witnessed..... Print name... Dated.... Address Witnessed..... Print name... Dated.... Address Signed... Loanee Print name... Dated.... Witnessed..... Print name... Dated.... Address Witnessed..... Print name... Dated.... Address Disclaimer Neither Brenda Gilligan nor Pritchard Englefield, Solicitors, or their employees, servants or agents, or anyone acting, purporting to act or holding themselves out as acting for either, can be responsible for any loss or damage, financial or otherwise, or injury, or any other adverse outcome howsoever caused, as a result of use of this sample loan agreement where the user has not taken independent legal advice on the contents of their own specific loan agreement prior to entering into

10 214 Appendix 1 any agreement or other arrangement, whether for loan or otherwise. It is strongly advised that you take such advice before entering into any type of agreement or arrangement, whether for a loan or otherwise. This sample is for guidance only.