Is this agreement legally binding?
July 11, 2008 11:30 PM Subscribe
I am about to lease a horse, with a 6-month option to buy. I am leasing him through a trainer who is acting as a go-between to another trainer who is representing the owner. Does this seem convoluted to anybody else...?
My trainer, who's not involved in the deal, is afraid that the lease might not be legal because we're going through so many layers to get to the owner. I feel that if the owner and I both sign the lease, this shouldn't be a problem. Am I wrong?
Another potential problem is that the trainer wants to list the horse's current asking price in the lease. If the lease says, for instance "asking price of $5,000", does that mean I'm bound to that price if I decide to buy? What if my trainer and I decide that the horse is only worth, say, $3000? Would it be better if the language said "asking price not to exceed $5,000" so that I would have some leeway?
I do not have a sharp legal mind. Any advice is appreciated.
My trainer, who's not involved in the deal, is afraid that the lease might not be legal because we're going through so many layers to get to the owner. I feel that if the owner and I both sign the lease, this shouldn't be a problem. Am I wrong?
Another potential problem is that the trainer wants to list the horse's current asking price in the lease. If the lease says, for instance "asking price of $5,000", does that mean I'm bound to that price if I decide to buy? What if my trainer and I decide that the horse is only worth, say, $3000? Would it be better if the language said "asking price not to exceed $5,000" so that I would have some leeway?
I do not have a sharp legal mind. Any advice is appreciated.
Isn't the point of an option to buy that it is an option to buy at a fixed price? So if it gives a price of $5,000 you would only be able to exercise the option if you paid $5,000. If it doesn't specify any price I don't see the point of having an option at all, because the owner could just say 'okay, you can exercise your option but only if you pay $8,000'. A range of prices could, depending on how it's worded, just set the price for exercising the option at the highest end of the range. I haven't read the agreement, though. It sounds complicated.
Or there might be other reasons for them wanted to set the 'asking price', whatever that means - insurance, tax, etc. Since you're talking about several thousand dollars, it might be worth taking it to a lawyer just to make sure you're not agreeing on the replacement value if the horse dies or something like that.
posted by A Thousand Baited Hooks at 12:19 AM on July 12, 2008
Or there might be other reasons for them wanted to set the 'asking price', whatever that means - insurance, tax, etc. Since you're talking about several thousand dollars, it might be worth taking it to a lawyer just to make sure you're not agreeing on the replacement value if the horse dies or something like that.
posted by A Thousand Baited Hooks at 12:19 AM on July 12, 2008
Are you kidding me? Could there be a more clear example of "hi, random strangers on the internet, give me legal advice?"
Go talk to a lawyer. If you can afford $5,000 for a horse, you can afford an hour with a lawyer to figure out if you're going to get screwed.
That said, if you're selling a house and I'm buying a house... it's pretty likely that both of us havetrainers real estate agents. This happens all the time. Two go-betweens is not really that many, in the grand scheme of things. Doesn't mean this situation is on the up-and-up, just that there's nothing inherent about that setup, absent a law to that effect, that would invalidate it as far as I know (IANAL, YMMV).
Still... go get yourself a lawyer. The cost is trivial compared to what you have to lose.
posted by toomuchpete at 5:40 AM on July 12, 2008
Go talk to a lawyer. If you can afford $5,000 for a horse, you can afford an hour with a lawyer to figure out if you're going to get screwed.
That said, if you're selling a house and I'm buying a house... it's pretty likely that both of us have
Still... go get yourself a lawyer. The cost is trivial compared to what you have to lose.
posted by toomuchpete at 5:40 AM on July 12, 2008
Definitely lawyer up, but this kind of two-or-more-trainers-involved deal isn't all that unusual (although it's more usual with more expensive and proven sport horses), but the sale price should be agreed upon before you sign, and included in the contract (this is how I did it on the two occasions I leased horses), if it's in there, you can bet that it's the asking price, and if you sign this contract, if you want to buy the horse, you have likely agreed to the $5K price. Get a lawyer to look it over for you and renegotiate if necessary. And do this before you really get attached to the horse, there are a LOT of decent horses out there in most places. Also, be sure you know about any and all finder's fees and commissions due to the trainers involved before you sign, and make sure things like insurance, vet care, wear and tear and everything else is explicitly covered in the contract, and do not even THINK about signing a contract without a thorough vet check beforehand (ideally including x-rays of feet and legs), so you don't end up getting sued by someone who claims you ruined their horse when it was on the verge of breaking down when you got it. A good vet check can save you a bundle in the long run. You may well be better off just having your trainer help you look for a horse you can lease directly from the owner.
posted by biscotti at 7:24 AM on July 12, 2008
posted by biscotti at 7:24 AM on July 12, 2008
The horse market (as others have mentioned) is slow right now, and so the trainers are probably just trying to make some money in a buyer's market. That said, I've done deals with two trainers before, but one of those trainers was always my trainer. Does your trainer know either of the other two trainers? Can you call the owner directly and talk to them about the deal?
Definitely vet him out thoroughly, and be prepared to walk away if you have to do so, at any point in the process (after vetting, after lease is up, etc.). All that said, this deal doesn't necessarily spook me out, as long as the trainers are known quantities in your community. The horse business has never been known to be incredibly straight-forward.
posted by weezetr at 7:58 AM on July 12, 2008
Definitely vet him out thoroughly, and be prepared to walk away if you have to do so, at any point in the process (after vetting, after lease is up, etc.). All that said, this deal doesn't necessarily spook me out, as long as the trainers are known quantities in your community. The horse business has never been known to be incredibly straight-forward.
posted by weezetr at 7:58 AM on July 12, 2008
Please don't lawyer up unless this is a horse with a value of over $100,000, or you have inordinate amounts of cash lying about, and time to deal with the hassle. It's just silly, and not worth it in most situations.
Having that many trainers involved is absolutely the norm. The trainer representing the owner is the owner's trainer. Trainers make a good deal of their money on the commission they get from finding buyers for their clients' horses, or horses for their clients to buy. The trainer dealing with you probably runs what's known as a sales barn, no? These trainers are "hubs" in the network of buying and selling - trainers send horses to them to be sold, or go to them to find a horse to buy.
Having leased a horse, I will also say that having the horse's current asking price included in the lease wording is also completely normal. It does not bind you to paying that price (unless it so states in the lease); it's merely an indicator, legally, of what the horse's estimated worth at that time is. You could have a say in this - talk to them about it. But an asking price is just that: an asking price. Ask them whether they'd consider it a contract to buy at that price or not.
The only red flag in your situation would be if you do not trust your trainer, or get a skeezy feeling from anyone else involved in the transaction. Does your trainer know the other two trainers involved? That's also important.
You're correct; as long as your and the owner's signatures are on the lease, it is completely legal and legit.
But seriously. This is SO. COMPLETELY. NORMAL. Don't freak out! Things in the horse world can seem a little casual sometimes, at the "lower end" (as I said above, it's only when you get to the six digits that things really seem to get legally serious). There are scumbags out there, but generally trainers have a reputation that they've worked very hard to build, and since it's such a close-knit world, they find it very hard to stay in business if they try underhanded tactics on any kind of regular basis.
And fshgrl is absolutely right: if you haven't, please do a pre-purchase exam!
Good luck. I wish you and your potential new horse every success!
posted by po at 10:28 AM on July 12, 2008
Having that many trainers involved is absolutely the norm. The trainer representing the owner is the owner's trainer. Trainers make a good deal of their money on the commission they get from finding buyers for their clients' horses, or horses for their clients to buy. The trainer dealing with you probably runs what's known as a sales barn, no? These trainers are "hubs" in the network of buying and selling - trainers send horses to them to be sold, or go to them to find a horse to buy.
Having leased a horse, I will also say that having the horse's current asking price included in the lease wording is also completely normal. It does not bind you to paying that price (unless it so states in the lease); it's merely an indicator, legally, of what the horse's estimated worth at that time is. You could have a say in this - talk to them about it. But an asking price is just that: an asking price. Ask them whether they'd consider it a contract to buy at that price or not.
The only red flag in your situation would be if you do not trust your trainer, or get a skeezy feeling from anyone else involved in the transaction. Does your trainer know the other two trainers involved? That's also important.
You're correct; as long as your and the owner's signatures are on the lease, it is completely legal and legit.
But seriously. This is SO. COMPLETELY. NORMAL. Don't freak out! Things in the horse world can seem a little casual sometimes, at the "lower end" (as I said above, it's only when you get to the six digits that things really seem to get legally serious). There are scumbags out there, but generally trainers have a reputation that they've worked very hard to build, and since it's such a close-knit world, they find it very hard to stay in business if they try underhanded tactics on any kind of regular basis.
And fshgrl is absolutely right: if you haven't, please do a pre-purchase exam!
Good luck. I wish you and your potential new horse every success!
posted by po at 10:28 AM on July 12, 2008
(I forgot to note that I would be comforted by the fact that you're dealing with multiple trainers, rather than just the owner. Trainers have something to lose if the deal goes bad; an owner doesn't, and can simply disappear into thin air when the deal is done. I always prefer dealing with trainers who have established businesses to owners.)
posted by po at 10:32 AM on July 12, 2008
posted by po at 10:32 AM on July 12, 2008
Response by poster: Everybody: Thanks so much! My first time asking a question here, and I got LOTS of useful advice. I DO know the trainer I'm dealing with -- he's my ex-trainer and I've known him for years -- and I will definitely do a vet check , which I already have lined up. I absolutely want to get all this taken care of before getting attached to the horse; I fall in love fast and I don't want to get into a situation I'm going to regret.
Toomuchpete; I get what you're saying, and you're right: the internet is no substitute for a lawyer, and I wasn't thinking of it as such. I would/will consult with a lawyer if necessary, but was hoping to get a feel for the situation from other horse people, or people who are familiar with contracts like this. It's not an elaborate contract, and I do have the option of walking away from it at any time and returning the horse to its owner. Just wanted to float the stuff I'm nervous about and find out if I should be nervous about it.
And, thanks, Po, for your good wishes... he's a lovely horse and I'm hoping to have lots of fun with him.
posted by OolooKitty at 3:42 PM on July 12, 2008
Toomuchpete; I get what you're saying, and you're right: the internet is no substitute for a lawyer, and I wasn't thinking of it as such. I would/will consult with a lawyer if necessary, but was hoping to get a feel for the situation from other horse people, or people who are familiar with contracts like this. It's not an elaborate contract, and I do have the option of walking away from it at any time and returning the horse to its owner. Just wanted to float the stuff I'm nervous about and find out if I should be nervous about it.
And, thanks, Po, for your good wishes... he's a lovely horse and I'm hoping to have lots of fun with him.
posted by OolooKitty at 3:42 PM on July 12, 2008
You didn't mention if the lease payments are credited against the potential purchase of the horse. If not, see if you can negotiate that into the contract. It's not particularly unusual, and if you pay $250 a month or so for 6 months for the lease that is a nice down payment on the horse if you can make it count.
posted by COD at 4:36 PM on July 12, 2008
posted by COD at 4:36 PM on July 12, 2008
Leasing a horse doesn't usually count towards purchase price (at least from what I've seen at our barn and other area barns). Leasing is a short way of saying "I'll pay you $X to use your horse Y amount of time." For whatever reason, horse people don't call it renting :)
posted by jdfan at 6:55 AM on July 13, 2008
posted by jdfan at 6:55 AM on July 13, 2008
Response by poster: COD: Yes, the lease payments will be credited towards a possible purchase, so that's all good. And jdfan: I guess "leasing" just sounds classier. Heh.
posted by OolooKitty at 9:28 AM on July 13, 2008
posted by OolooKitty at 9:28 AM on July 13, 2008
This thread is closed to new comments.
And don't be afraid to walk away, it's a buyers market out there right now.
posted by fshgrl at 11:40 PM on July 11, 2008