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Lease Considerations

Considerations when Leasing
After choosing your horse you may decide to lease the horse for a period of time instead of or before buying.  This a collection of the most frequent problems compiled from several "best practice" equestrian legal sources to help protect you when leasing

PROBLEM # 1 - Disputes arise when the lessor suspects the lessee is giving the horse substandard care and attention.
Lessors sometimes want to end a lease arrangement early because they believe the horse has received substandard care. Before this ever happens, the lease contract can specify the type and quality of care the leased horse must receive. A more detailed contract can even specify the quality and quantity of feed, supplements, turnout requirements and restrictions, specific farrier and veterinary attention the horse must receive, and much more.      The lease contract can also address the standard or quality of care the lessee must give the horse when the lease is in effect. As an example, if the horse is a high-caliber show horse, the contract can specify that the horse must receive the quality of care, feed, handling, attention, and stabling customarily given to horses of this caliber.

PROBLEM # 2 - Disputes arise over the use of the leased horse.
The horse's use can generate disputes. What if, for example, the lessee plans to jump the horse at a height the lessor finds unacceptable? Or, what if the lessee wants to use the horse for barrel racing, against the lessor's wishes? Careful planning can prevent these disputes. That is, the lease contract should explain the horse's uses and restrictions, if any.

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PROBLEM # 3 - Liability disputes can occur if the leased horse injures the lessee.
Worst-case scenarios -- such as the lessee getting injured while riding or near the horse -- can, and do, occur. Equine activity liability laws do not always provide the protection you might expect against certain types of lawsuits.
The written lease document can anticipate and prepare for liabilities. In an attempt to reduce the chances of being sued by an injured lessee, for example, the lessor could require the lessee to sign a carefully worded release of liability that complies with specific requirements of the applicable state's law. Liability releases (also called "waivers") can be very powerful, when properly written and when properly signed. Both of my books and many of my articles have discussed these documents in detail and even give some examples of liability releases that were powerful enough to defeat a lawsuit.

PROBLEM # 4 - Liability disputes can occur if the leased horse injures someone else during the term of the lease arrangement.
What if the leased horse injures the lessee's friend or relative? Merely because the lessee agreed not to sue the lessor, by signing a liability release to this effect, does not mean the lessor is protected against a lawsuit brought by someone else.

In an attempt to help the lessor avoid liability if someone else is hurt during the term of the lease, the lessor could also require the lease document to cover other matters, such as:
  • Releases of liability.
    The lessor might consider supplying the lessee with several properly worded release documents and requiring the lessee to have people (of legal age) sign these documents before they can ride or handle the leased horse.
  • Indemnification clauses.
    Lessors of horses would be wise to insist on properly worded indemnification clauses in their documents. Indemnification, in its most basic sense, is an arrangement in which someone agrees to protect and compensate another for an anticipated loss or liability. As an example, an indemnification provision within an equine lease could generally state that if there is loss or liability asserted against H.S., the lessor, due to actions (or omissions) of the lessee during the term of the lease, then the lessee agrees to pay the lessor's legal fees as well as any liabilities or judgments asserted against the lessor. These documents and clauses are more complex than they may seem, and they deserve the attention of a knowledgeable lawyer.
  • Liability insurance.
    The parties to the lease might agree that a policy of liability insurance should be in effect during the lease arrangement. This type of insurance, such as personal horse owner's liability insurance, would be designed to cover liabilities that might arise during the term of the lease. A detailed lease can even specify the minimum amount of liability insurance coverage and exactly whom the insurance will protect in the event that a claim is made.

PROBLEM # 5 - Disputes arise if the leased horse becomes seriously ill or lame.
It is always foreseeable that the leased horse could become injured, ill, or even die during the lease term. In their agreement, the parties can address whether the leased horse should be insured through a policy of mortality, loss of use, and/or and major medical insurance. Certainly, the insurer issuing the policy would be notified of the lease arrangement.

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