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Understanding the importance of equine loan agreements

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For many people loaning out their beloved horse or pony is the only way to keep them in their ownership and thus avoid a sale. Many loans are agreed verbally, on the basis that “we’ll sign something later” or “I know they are good people… Bob said so”.

Loan agreements can be drawn up personally or by a solicitor. However, we always recommend involving an impartial legal professional, trained to ensure that all the grey areas are covered.

Loan agreements can be as simple or as complicated as the owner and the loaner want them to be. The loan agreement is, in essence, a statement of fact confirming the ownership and intended scope of the loan, and a set of guidelines that both parties can refer to, to ensure that they get the most of their arrangement.

It is a binding contract that can be relied on in Court if necessary. Protecting your horse is always the ultimate goal and, by entering into a formal agreement, this is exactly what you are doing – ensuring that you have done your best to secure your horse’s future.

What should you consider in your loan agreement?

The contents of the loan agreement are personal to you and should reflect your wishes and plans for the future. However, as a basic minimum you may wish to consider the following:

  • Do you wish to see the premises where the horse is to be kept? If you’ve approved the stabling you may wish to specify, in the agreement, that the horse can’t be moved without your approval.
  • Over what period should the loan last? You should set this out clearly and ensure that the loan can be cancelled earlier, should you wish it, on provision of reasonable notice by either party.
  • Who will be responsible for transportation costs at the start and end of the loan?
  • The permitted uses of the horse should be detailed in the loan agreement. If the horse is a mare or stallion, consider whether the option to use the animal for breeding should be allowed or forbidden in the agreement. Also, remember that any insurance for the horse should cover all the activities for which it is used.
  • Who may ride the loan horse?
  • Do you wish to specify which vet should treat the horse?
  • Is adequate insurance in place to cover essentials such as death and theft, vet’s fees and personal liability? Is it detailed in the loan agreement who is responsible for taking this out? Loss of use insurance should be considered in case the horse or pony becomes permanently unable to be used for some activity due to accident, illness or disease.
  • Is tack to be included in the loan? Is this included in the insurance agreements for repair or replacement?
  • General provisions for the care of the horse should be included – keeping vaccinations up to date, stabling or keeping at grass, frequency of worming, shoeing and the like. If there are any special needs such as feed supplements, soaked hay etc., make sure these requirements are included in the agreement. Similarly, if the horse has any vices or allergies, note these in the written contract so that there is no misunderstanding.
  • Do you wish to specify an option to visit or ride the horse? You should note notice periods for this in the loan.
  • What happens if you decide to sell the horse? Do you wish to offer the person loaning the horse first refusal to buy it?
  • Do you wish to include a clause detailing action in respect of dispute resolution?

Before you sign anything make sure you have carefully checked out the person loaning the horse. Take photographs of the horse with the person and note the registration details of the horsebox or car.

Further guidance

To discuss loaning your horse and to get professional support in drawing up a loan agreement contact Rebecca Stuart on 01275 850470. For help with handling disputes on this subject contact James Taylor on 01454 204880.

Visit our Equine law services page for a full list of services we can provide.

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