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  Discussion on Contract for trainer and seller for commisioned horse?
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Posted on Thursday, Mar 28, 2002 - 1:56 pm:

Hello! I am a dressage trainer in Maryland who has finally gotten to open my own training barn. I have a few private boarders (say, 10 or so) and I take on clients for 30, 60, 90 days training at a specified monthly rate for my time and knowledge. I also have a couple resale horses I have purchased, advanced in training, and am now offering for sale. I am still quite new to the "legal" end of this business and have downloaded (from zerolitigation) sample boarding contracts (which were GREAT!), sales and leasing contracts from a few other equine law websites. What I cannot find is a sample trainer's commission contract. I don't know what the standard or reasonable commission rate is for a trainer for this area (it's an expensive horse area) and I have a client who will be bringing me a 7 year old Oldenburg mare to commission for her who is already started and trained through first level and is working on 2nd level movement. Her expectations of me are to invest my time in advancing the mare and to get the highest price possible for her. Now, I'm new at the idea of commissions, and in the forums I've been looking in I cannot find people talking about the fact that the trainer is adding value to the horse daily. What if I train her for 60 days, while supporting her in boarding, advance her, and then the seller decides to take her back and try to sell her on her own? She gets back a much more valuable horse with free training? Should there be a stipultaion in the contract that if she decides to "no sale" the mare or take her back that she should pay the standard training rate for the time the horse was there? What if SHE finds a buyer on her own? And who pays for her shoeing, vet bills etc while I am trying to find a buyer for the horse? (I'm assuming that's me) Oldenburgs are quite expensive and due to their price do not necessarily sell quickly. In addition, I don't want to be stuck with supporting this horse for free for 8 months AND investing my time in advancing her, therefore eating up any commission I might have made on her. Should there be a clause to protect both of us if I am unable to find a buyer after a certain time period? And then who pays for the expense of it all? Do I just chalk it up to wasted time and money and hand her back her horse and say "I'm very sorry I couldn't find a buyer at your price?" And who pays for advertising her? (I'm assuming it's me--I just want to check on that) Yes, I'm very new at the idea of a commissioned horse, so please, any thoughts would be appreciated! This horse is supposed to be arriving in a matter of a couple weeks, and the seller (wisely) has asked to see a contract to make sure we have all the particulars in writing beforehand. So far, there has just been a verbal agreement of "I want X amount for this horse, and anything you can get above and beyond that is yours to keep", but I've also been told "I want you to get as much as possible for the horse" (duh!) and I doubt she was saying that because she's morally concerned with how much money I make off the horse :-) This is a great opportunity for both myself and her, so I'd like to make sure we handle this well!

P.S.--Yes, I know my username is spelled wrong--someone already had the correct spelling......

Posted on Friday, Mar 29, 2002 - 11:59 am:

Hi Leeandra - (what a beautiful name)

First off, do you have a Frieisan? I do and he's the best. Secondly, I have to tell you, I am not a professional trainer by any stretch of the imagination - I just bomb around on my Friesian, Rembrandt. I HAVE a professional trainer... I'm not a lawyer, either. I'm an engineer.

It looks to me like you are doing great. All the things you think of are fantastic. I never would have thought like that but every scenario is so credible. What I have done in the past (and I'm not saying it is the right thing to do, it's just what I did) is I wrote everything that I was thinking about down on a piece of paper. I went over to Holland to buy my Rembrandt and thought of everything I could that might go wrong. Made it look kind of official, in the same format as the zerolitigation Bill of Sale. Then the seller and I signed it. If nothing more, doing this will get you to talk to your client and have him/her consider all of these scenarios and the two of you can agree up-front how they will be handled fairly, when emotions are low. I did the same thing for a boarding contract. Wrote down the things that were important to me, and the farm manager wrote responses that we agreed to, up-front.

Go ahead, those of you truly in the know - set me straight! I don't want to give bad advice, but it's the best advice I could come up with.

Posted on Friday, Mar 29, 2002 - 1:35 pm:

I would have thought that if you are training a horse for someone you would charge for the cost of training in addition to the sale of the animal. My trainer has what she calls training board which is the cost of regular board and then the cost for a months training on top of that. (The two together are discounted a bit). For example board is say $450.00 and a training ride is $20.00 (for however long you decide to ride)/day, 5 days a week. So my trainer would charge say $700.00/month for the training board. Then if she sells the horse she expects a commission, variable depending on the price of the horse. The owner pays for the shoeing and vet bills. As far as I can determine in the PA area many of the horses are sold through word of mouth and brokers.

Carol

Posted on Friday, Mar 29, 2002 - 10:48 pm:

Dear Leeandra:

I agree with Joni. Write down everything. It is much easier to take something off (strike it) than it is to try to add something later. I am an Accountant who long ago learned that Attorneys can suck you dry for drafting something that more difficult to understand and less enforcable than a well written agreement between two non-attorneys.

Free form your ideas (such as you put in your post), organize them by purpose, then ask yopurself is point 1 important? how important? what if the other party disagrees? what if it is violated (ie. what is the recourse or penalty)? Then do the same for point 2.. etc. When you are all done set it aside for at least a day and then reread and revise. I could give more precise guidelines but I don't want to bore you do death.

Best of luck in your endeavors!

Dennis

Posted on Saturday, Mar 30, 2002 - 5:23 pm:

Hello

I used to have a roommate that runs a training and sales barn and I can tell you how she handled the sales situation.

She has a special "Sales training/boarding" rate. Those horses that come in for sale get charged about 20% a month less than a regular boarder or training horse. When the owner sends the horse in for sale they sign a listing contract (just like in real estate) that way the owner is legally bound to sell the horse through the trainer for a certain amount of time. If for some reason the horse isn't sold in that amount of time the owner can relist the horse or just take it home (as long as all of the other fees are paid).

In all honesty I think almost every horse that comes in gets sold. She makes a 10 - 20% commission on the horse. The amount of commission does vary by sales price of the horse. She charges a little more for commission when the horse is worth less. She regularly sells horses in the price range of $5,000 to $50,000. She also leaves room in the contract, based on what kind of relationships she has with the owners. If it's a long time client that moving up to a different horse and she's handling both sales, she will charge less commission on each sale to help the client. If all she's doing is selling the horses she tends not not cut as many deals. She's been in the industry for so many years that most of the people who buy horses from her know what they're getting and that she's very honest.

She has worked hard to gain a good reputation. She wants both the buyer and the seller to go away happy. She has lost a few clients though by NOT selling them an inappropriate horse for their level.

I hope some of this helps. Good luck

Heidi

Posted on Monday, Apr 1, 2002 - 10:03 am:

Thanks! These are some very useful ideas--especially yours, Heidi! I like the idea of giving a reduced training rate to a commission horse. So, Heidi--did your roommate actually take money monthly from the owner while the horse was actively there and being worked on for sale, or did she just take whatever the charge ended up being off the top when it came time for the money to change hands once the horse was sold? I have to say we are just starting out, so our capital is, well, modest at best. Supporting an additional horse while waiting for payment is feasible for us, but will be a stretch. I am an exceedingly honest person, but looking at it from the client's perspective I would wonder a bit at the care and attention my horse would receive if it was brought up that there are concerns (not doubts, just concerns) regarding the financial ability to take on another horse for sale. I have 2 resale horses I'm currently supporting which are owned be me, along with my 2 personal horses and a foal on the way in the next couple weeks--what with spring shots, vet checks and farrier I'm a little stressed...... I know we can make it happen--and no horse on our farm EVER suffers from any lack of care due to financial contraints in the business startup--but it would be a help if we were given the money to support the horse while she's in our care. Is that wrong to ask? Would it raise a flag in your mind? As it is now, I give all the horses under our care the best of everything and attend to whatever they need and worry about getting payment from the owner later, but it's hard when you don't have a huge cushion yet in your business to absorb these costs. Any thoughts on this? Should I not even bring it up to the owner of the horse and just suck up the cost until I can get the money back?
Oh--and yes I have a Friesian Ster mare who is the Pregnant One. She's due to pop any day now!

Posted on Monday, Apr 1, 2002 - 11:21 am:

Yes, my roommate gets monthly board on the horses that are at her barn for sale. The owner's get billed monthly just like the other boarders. So far, I don't believe too many people have problems with this scenario. Of course these are usually higher dollar horses, that the owner would be paying board and training on anyway. From what I have seen, the owners are happy because they can get higher prices for the horses when my roommate sells them, than if they sold them on their own.

Good luck with your endeavor and good luck with the Friesian foal. I bet you are getting excited.

Posted on Monday, Apr 1, 2002 - 11:23 am:

Who is the foal's father?
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