Monday, February 8, 2010

Life........and Its Lessons........Buying

Part 1

Probably the slipperiest slope in the horse industry has to do with contracts, I would think. All kinds of contracts from the sale or purchase of horses to contracts for work can be difficult. I would imagine it is the nature of the beast such transactions require close attention. That is why contracts are important.

I have bought and sold a number of horses on contracts. . I've also managed to get myself in trouble with contracts for work. It seems like the biggest pitfalls in the horse industry for me fall into these categories. While, so far, I have managed to weather such things, it has not been without some wear and tear.

I find myself looking back at these situations and wondering what I might change. What can I do to assure I get from any arrangement what I expected to get when I entered into it? I imagine that is probably the $64,000 question to most people (for those of you too young to know, "the $64,000 Question" was the name of a quiz show back in the day.)

Obviously when I started out in the horse industry I made lots of mistakes. Some of those things bit me while others did not. Just because a mistake didn't get me in some way, doesn't mean I can't learn from it.

I would imagine everyone "knows" that contracts are important and they should be written. I certainly know that but not being an expert on contracts and particularly on those involving horses, there were lots of things I didn't know.

Expectations can be different though unspoken, any contract needs to cover all expectations or things can turn out badly. That is one thing I have learned the hard way.

The first horse I ever purchased was on a contract. It was a basic format provided by the trainer at the farm where the mare lived. There were, however, unusual payment terms made to accommodate my form of income. The requirements were not really spelled out at the time. Payments were scheduled at specific intervals while my income was more sporadic.

It was not a problem in and of itself but only because the party holding the paper did not turn it into something. The lope holes for abuse are evident looking back at that old document. The specifics of the payments involved really should have been spelled out. I am fortunate I was dealing with a person with integrity. She was willing to work with me and the fluctuations of payments instead of cashing in on my inability to meet the terms of the contract as written.

The second horse I purchased was a horse for Dave.That purchase was also made via a contract. The document was the very same format as that used for my first horse. The only differences were the dollar amount and the information on the horse. The seller involved was different but fortunately connected to the first party.

The payment issues were spelled out the same way as on the first contract and I had the same issues meeting those terms. BUT my life got way more complicated because my daughter was diagnosed with a brain tumor. I was unable to make my payments as I had with the first horse or anywhere even close.

There were no provisions for late payments or emergencies in that contract. Luckily for me, the party I was purchasing the horse from took into account what was happening with my daughter and allowed me to be late paying off that second horse. If I recall correctly she didn't even charge me the added interest the contract would have allowed. I paid no more than I would have had the horse been paid off in a timely manner. Again, I lucked out, I was dealing with a woman with integrity and compassion.

That was not the case, however, with the third horse I purchased. That horse, too, was purchased on a contract. It was purchased at almost the same time as the second horse. The party I purchased the horse from was more interested in her money than in the spirit of our contract.

There were terms of the contract that were not put on paper. Those terms specifically were I wouldn't begin paying for the third horse until the second horse had been entirely paid off. The fact that was not written came back to bite me. Instead the date the second horse was scheduled to be paid for was used as the start date of payments on the third contract. That put me into a very difficult situation when I didn't get the second horse paid for on time.

There was no way I could begin making payments on the third horse when I hadn't even paid off the second. My daughter was fighting for her life and her illness was eating up every cent we had.

That third horse was Lindsay's therapy horse and the major reason my daughter was still alive. Yet I faced the prospect of losing him because the holder of the paper was not honoring the spirit of our original transaction. I had really messed up by not making sure it was written into the contract the way it was agreed upon.

.For me, when I had negotiated the purchase of the third horse, it clearly meant that I would not/could not begin paying on the third horse until the second contract was completed whenever that might be. I never would have purchased this third horse had that not been the case. I made the mistake of assuming, because this was someone I knew, this was understood and would be honored yet that was not the case.

While the contract I had didn't guarantee me the terms that we had agreed to, it did afford me protection in another way. Having the contract did "save" me from something that could have ended quite tragically.

To be continued.......................

Buying........the Unexpected

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  1. Contracts are something I failed to put together this past year when training for others. Fortunately, two of the three worked out beautifully. The third failed to pay...and I let her simply fade away to get her wood eating horse out of my sight. But I agree that these are things that really, truly need to be in writing so that people are aware of the expectations on both sides of the coin.

    Like you, I tend to go with the spirit rather than the letter of a contract, but not everyone is so forgiving.

  2. Live and learn. I've never done anything without a contract or a release affording some sort of protection when we were involved with the boarding/training business. People being people it's just a smart idea to cover your butt.

  3. Contracts can make or break you in a lot of ways. One of the best ways to have a contract that conveys fairness to both parties involved is to have a third party write them. I am getting really good at writing contracts.

    Having been on both sides as buyer and seller, I have felt the strains and issues from both sides of the fence. A contract can be your best friend or worst enemy depending on who the other signature belongs to.

  4. Contracts are ,always better than not having anything on paper ,but there are so many pitfalls.