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Thursday, September 29, 2011
Would your liability release withstand Appellate Court scrutiny?
In 2010, the California Appellate court overturned a judgment because it found the exculpatory language in the rental contract for scuba equipment did not provide a complete defense to a wrongful death action. The case in issue, Huverserian v. Catalina Scuba Luv, Inc. (2010) 184 Cal.App.4th 1462 reiterated the courts’ previous decisions stating that for a release to be valid and enforceable, a written release must be clear, unambiguous and explicit in expressing the intent of the parties. Further, if a party is to be released from such liability, the language used must be clear, explicit and comprehensible in each of its essential details and must clearly notify the prospective releaser of the effect of signing the agreement. The release used by the Catalina Scuba Luv company stated, “Equipment rental agreement, liability release and assumption of risk of scuba and snorkel gear for boat dives or multiple day rentals”. The problem with this language is its specificity, particularly the part stating “for boat dives or multiple day rentals”. The court found the release was unambiguous, clear and explicit and had the plaintiffs rented the gear for a boat dive or a multiple day rental, the release would have adequately protected Catalina Scuba Luv. Unfortunately, Huverserian rented the scuba gear, went to a dive area without a boat, and entered the water where he subsequently died. The court found the release did not address this type of activity and therefore Huverserian was not barred from pursuing a wrongful death action. What can equestrians take away from this ruling? That it is necessary to draft a release broadly enough to encompass all anticipated equestrian activities while avoiding ambiguity. Liability release language will continue to be challenged and the law regarding releases will continue to evolve. One tool that can be included in a liability release to deter a legal challenge is the inclusion of a covenant not to sue clause. This clause differs from a release in that the covenant not to sue is a promise not to pursue litigation while a release is an abandonment or relinquishment of a right or claim. When included in a liability release, if a party then proceeds with litigation against a stable, for example, the stable would be able to file a cross-complaint for breach of covenant. If paired with an attorneys’ fees and costs clause to the prevailing party, the stable may be able to avoid the threat of litigation to challenge the language of the liability release. If you would like more information on this or other topics, please feel free to visit our website www.legalequestrian.com or contact our office at 949-264-1464. This article is meant to provide general information only and is not intended to constitute legal advice. The information in this article is not intended to establish an attorney-client relationship between attorney and reader. The contents of this article are not a substitute for seeking the advice of legal counsel. Copyright 2011. Legal Equestrian, a Professional Law Corporation All rights reserved.
Thursday, April 8, 2010
New Flat Fee Packages
Take advantage of our Flat Fee Packages. In an effort to meet our clients needs in today's economy we are now offering the following legal packages. Each package is valid for a one year period.
Basic Package 10 hours of non-litigation attorney services at a reduced hourly rate of $225.00. Total cost $2,250.00 / Perfect for the new horse business interested in business formation and new contracts or contract revision.
Standard Package 25 hours of non-litigation attorney services at a reduced hourly rate of $200.00. Total cost $5,000.00 / Perfect for the new or established horse business that conducts horse transactions throughout the year.
Premium Package 40 hours of non-litigation attorney services at a reduced hourly rate of $175.00. Total cost $7,000.00 / Perfect for the busy horse business that conducts multiple horse transactions throughout the year.
Basic Package 10 hours of non-litigation attorney services at a reduced hourly rate of $225.00. Total cost $2,250.00 / Perfect for the new horse business interested in business formation and new contracts or contract revision.
Standard Package 25 hours of non-litigation attorney services at a reduced hourly rate of $200.00. Total cost $5,000.00 / Perfect for the new or established horse business that conducts horse transactions throughout the year.
Premium Package 40 hours of non-litigation attorney services at a reduced hourly rate of $175.00. Total cost $7,000.00 / Perfect for the busy horse business that conducts multiple horse transactions throughout the year.
Partnerships in the Horse Industry
Last year I bought a horse with my friend who is a trainer. I paid for the horse and my friend trained and showed him. We’ve had fun and made a little money, but now I would like to move barns and trainers. My friend says I can’t take my horse because we’re partners. How did I end up with a partner?
Many individuals with business relationships in the horse industry are actually a part of a partnership whether they realize it or not. Unfortunately, many people are also unaware of the various duties and liabilities that attach to such a relationship. A partnership is a fiduciary relationship and therefore, partners may not take advantages for themselves at the expense of the partnership. In other words, if you are a partner in a boarding facility venture, you can’t take a few bales of hay to your barn for your personal benefit without reimbursing the boarding facility. Further, partners are held to the standards and duties of a trustee in their dealings with each other, and in all proceedings connected with the conduct of the partnership, every partner is bound to act in the highest good faith to his or her copartner and may not obtain any advantage over him or her in the partnership’s affairs by the slightest misrepresentation, concealment, threat or adverse pressure of any kind.
A partnership places the duty of loyalty on the partners and such duty requires him or her [Corp. Code, § 16404, subd. (b)]: (1) to account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by the partner of partnership property or information, including the appropriation of a partnership opportunity, (2) to refrain from dealing with the partnership in the conduct or winding up of the partnership business as or on behalf of a party having an interest adverse to the partnership, and (3) to refrain from competing with the partnership in the conduct of the partnership business before the dissolution of the partnership.
The California Uniform Partnership Act of 1994 governs partnerships in California. The Act defines a partnership as an association of two or more “persons” to carry on, as co owners, a business for profit. Under this Act, a partnership can be formed whether or not the persons involved intended such a relationship. Typically, two or more individuals will combine their money, property or time to purchase a horse without fully contemplating who will have control over decisions for the care and keeping of the horse, including vet care, training, show participation and boarding, as well as, how the partnership will eventually be dissolved. Failure by the parties at the onset to resolve these issues often leads to a deterioration in the relationship and often times, litigation. For example, if an individual purchases a horse and a trainer puts time and effort into training and showing the horse with the parties sharing equally in the costs and profits, this relationship could be determined to be a partnership. In this scenario, the horse owner may be surprised to find he or she cannot simply walk away from the relationship with the horse even though he or she purchased it. The horse became an asset of the partnership relationship and must be properly factored into the dissolution of the relationship.
Another pitfall of finding oneself in a partnership relationship is exposure to liability for the actions of the other partners. A partnership is an entity unto itself and separate from the individual partners. It is possible for one partner to obligate the partnership without the consent of the other partners. For example, the trainer in the scenario above may decide he or she needs a more reliable horse trailer and purchases said trailer in the name of the partnership business. The partnership is now obligated to manage that debt despite lack of consent.
In order to avoid misunderstandings and potential litigation in partnership relationships, parties should enter into clearly defined written partnership agreements that clearly set forth the rights and responsibilities of both the partners and the partnership business.
This article is meant to provide general information only and is not intended to constitute legal advice. The information in this article is not intended to establish an attorney-client relationship between attorney and reader. The contents of this article are not a substitute for seeking the advice of legal counsel.
© Copyright 2010. Legal Equestrian, a Professional Law Corporation All rights reserved.
Many individuals with business relationships in the horse industry are actually a part of a partnership whether they realize it or not. Unfortunately, many people are also unaware of the various duties and liabilities that attach to such a relationship. A partnership is a fiduciary relationship and therefore, partners may not take advantages for themselves at the expense of the partnership. In other words, if you are a partner in a boarding facility venture, you can’t take a few bales of hay to your barn for your personal benefit without reimbursing the boarding facility. Further, partners are held to the standards and duties of a trustee in their dealings with each other, and in all proceedings connected with the conduct of the partnership, every partner is bound to act in the highest good faith to his or her copartner and may not obtain any advantage over him or her in the partnership’s affairs by the slightest misrepresentation, concealment, threat or adverse pressure of any kind.
A partnership places the duty of loyalty on the partners and such duty requires him or her [Corp. Code, § 16404, subd. (b)]: (1) to account to the partnership and hold as trustee for it any property, profit, or benefit derived by the partner in the conduct and winding up of the partnership business or derived from a use by the partner of partnership property or information, including the appropriation of a partnership opportunity, (2) to refrain from dealing with the partnership in the conduct or winding up of the partnership business as or on behalf of a party having an interest adverse to the partnership, and (3) to refrain from competing with the partnership in the conduct of the partnership business before the dissolution of the partnership.
The California Uniform Partnership Act of 1994 governs partnerships in California. The Act defines a partnership as an association of two or more “persons” to carry on, as co owners, a business for profit. Under this Act, a partnership can be formed whether or not the persons involved intended such a relationship. Typically, two or more individuals will combine their money, property or time to purchase a horse without fully contemplating who will have control over decisions for the care and keeping of the horse, including vet care, training, show participation and boarding, as well as, how the partnership will eventually be dissolved. Failure by the parties at the onset to resolve these issues often leads to a deterioration in the relationship and often times, litigation. For example, if an individual purchases a horse and a trainer puts time and effort into training and showing the horse with the parties sharing equally in the costs and profits, this relationship could be determined to be a partnership. In this scenario, the horse owner may be surprised to find he or she cannot simply walk away from the relationship with the horse even though he or she purchased it. The horse became an asset of the partnership relationship and must be properly factored into the dissolution of the relationship.
Another pitfall of finding oneself in a partnership relationship is exposure to liability for the actions of the other partners. A partnership is an entity unto itself and separate from the individual partners. It is possible for one partner to obligate the partnership without the consent of the other partners. For example, the trainer in the scenario above may decide he or she needs a more reliable horse trailer and purchases said trailer in the name of the partnership business. The partnership is now obligated to manage that debt despite lack of consent.
In order to avoid misunderstandings and potential litigation in partnership relationships, parties should enter into clearly defined written partnership agreements that clearly set forth the rights and responsibilities of both the partners and the partnership business.
This article is meant to provide general information only and is not intended to constitute legal advice. The information in this article is not intended to establish an attorney-client relationship between attorney and reader. The contents of this article are not a substitute for seeking the advice of legal counsel.
© Copyright 2010. Legal Equestrian, a Professional Law Corporation All rights reserved.
Monday, October 26, 2009
Thursday, October 15, 2009
AS-IS Clause in Horse Purchase Contract Article
EQUESTRIAN LEGAL QUESTION & ANSWER by Lisa L. Lerch, Esq.
I recently bought a horse and discovered it has a pre-existing lameness issue that the seller knew about and failed to disclose. I would like to return the horse, but the seller refuses based on the “AS-IS” clause of our contract. Is there any way to deal with an “AS-IS” contract?
Absolutely. When there is fraud in the inducement of the contract, the buyer can seek to rescind or unwind the contract.
The “AS-IS” clause is a favorite among horse sellers and is commonly found in sales contracts. In a horse sales contract, the “AS-IS” clause is used to describe a sale of a horse in its then-existing condition. The use of the phrase “AS-IS” or “With All Faults” will generally relieve the seller of any liability for visible and observable existing defects.
Where the seller has knowledge of a pre-existing condition and fails to disclose that information to the detriment of the buyer, the buyer can seek rescission of the contract based on fraud. The “AS-IS” language will not protect a seller from liability for the seller’s fraudulent representations.
If a seller misrepresents the condition of the horse or intentionally conceals any of the horse’s defects that are not otherwise visible or observable by the buyer and that misrepresentation or concealment affects the value or desirability of the horse, the seller cannot escape liability through an “AS-IS” clause.
Both intentional misrepresentation and the concealment of a material fact are forms of fraud. Seller’s failure to disclose a material fact such as a previous surgery to correct a lameness issue would constitute a concealment of a material fact. Seller actively injecting a horse to mask a lameness issue and failing to disclose that injection and lameness issue would constitute an intentional misrepresentation. Once a buyer determines fraud has taken place, the buyer should seek to repudiate the contract in a prompt and timely manner. Buyers should note that general statements by the seller regarding the horse’s soundness or ability to win blue ribbons in the future may not rise to the level of fraud and would most likely be considered “puffing” by the courts.
A pre-purchase exam can often determine whether the horse has any visible or observable defects that may affect the horse’s performance or value. Unfortunately, a typical pre-purchase exam does not include x-rays or blood work and many pre-existing conditions and medications can go undetected.
In an effort to avoid costly litigation, sellers with knowledge of a problem or condition that may render the horse less valuable or desirable than that which the buyer bargained for should always error on the side of disclosure. Buyers should also further protect themselves and include both x-rays and blood work in their pre-purchase exams.
If you would like more information on this or other topics, please feel free to visit our website at www.legalequestrian.com or contact our office at 949-264-1464.
This article is meant to provide general information only and is not intended to constitute legal advice. The information in this article is not intended to establish an attorney-client relationship between attorney and reader. The contents of this article are not a substitute for seeking the advice of legal counsel.
© Copyright 2009. Legal Equestrian, a Professional Law Corporation All rights reserved.
I recently bought a horse and discovered it has a pre-existing lameness issue that the seller knew about and failed to disclose. I would like to return the horse, but the seller refuses based on the “AS-IS” clause of our contract. Is there any way to deal with an “AS-IS” contract?
Absolutely. When there is fraud in the inducement of the contract, the buyer can seek to rescind or unwind the contract.
The “AS-IS” clause is a favorite among horse sellers and is commonly found in sales contracts. In a horse sales contract, the “AS-IS” clause is used to describe a sale of a horse in its then-existing condition. The use of the phrase “AS-IS” or “With All Faults” will generally relieve the seller of any liability for visible and observable existing defects.
Where the seller has knowledge of a pre-existing condition and fails to disclose that information to the detriment of the buyer, the buyer can seek rescission of the contract based on fraud. The “AS-IS” language will not protect a seller from liability for the seller’s fraudulent representations.
If a seller misrepresents the condition of the horse or intentionally conceals any of the horse’s defects that are not otherwise visible or observable by the buyer and that misrepresentation or concealment affects the value or desirability of the horse, the seller cannot escape liability through an “AS-IS” clause.
Both intentional misrepresentation and the concealment of a material fact are forms of fraud. Seller’s failure to disclose a material fact such as a previous surgery to correct a lameness issue would constitute a concealment of a material fact. Seller actively injecting a horse to mask a lameness issue and failing to disclose that injection and lameness issue would constitute an intentional misrepresentation. Once a buyer determines fraud has taken place, the buyer should seek to repudiate the contract in a prompt and timely manner. Buyers should note that general statements by the seller regarding the horse’s soundness or ability to win blue ribbons in the future may not rise to the level of fraud and would most likely be considered “puffing” by the courts.
A pre-purchase exam can often determine whether the horse has any visible or observable defects that may affect the horse’s performance or value. Unfortunately, a typical pre-purchase exam does not include x-rays or blood work and many pre-existing conditions and medications can go undetected.
In an effort to avoid costly litigation, sellers with knowledge of a problem or condition that may render the horse less valuable or desirable than that which the buyer bargained for should always error on the side of disclosure. Buyers should also further protect themselves and include both x-rays and blood work in their pre-purchase exams.
If you would like more information on this or other topics, please feel free to visit our website at www.legalequestrian.com or contact our office at 949-264-1464.
This article is meant to provide general information only and is not intended to constitute legal advice. The information in this article is not intended to establish an attorney-client relationship between attorney and reader. The contents of this article are not a substitute for seeking the advice of legal counsel.
© Copyright 2009. Legal Equestrian, a Professional Law Corporation All rights reserved.
Thursday, July 16, 2009
A quick look at Legal Equestrian
Legal Equestrian, a PLC was formed in 2007 to meet the unique needs of the equine industry in California.
Because California does not have a specific set of legal statutes that address the needs of the equine community, the courts rely on a variety of statutes including but not limited to contract law, tort law and probate law. An attorney who is familiar with the needs of the horse community and is up to date on current equine law development is able to better analyze equine breeding, buying, selling and management issues in a timely manner.Parties often find themselves embroiled in litigation that is expensive, time-consuming and unpredictable simply because they entered into a transaction without a written agreement. The handshake deal does not work anymore.
Because California does not have a specific set of legal statutes that address the needs of the equine community, the courts rely on a variety of statutes including but not limited to contract law, tort law and probate law. An attorney who is familiar with the needs of the horse community and is up to date on current equine law development is able to better analyze equine breeding, buying, selling and management issues in a timely manner.Parties often find themselves embroiled in litigation that is expensive, time-consuming and unpredictable simply because they entered into a transaction without a written agreement. The handshake deal does not work anymore.
Special Services Offered
Legal Equestrian offers customized contracts, purchase sale agreements, lease agreements, boarding contracts, hauling release and waivers, liability releases, training contracts, business formations, horse insurance advice, authorization to treat, full service litigation of all horse related disputes, breeding contracts, horse injury disputes, and mortality disputes.
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