Sales contract...of sorts. Help please!

[jessjc]

So, my lovely warmblood mare needs to be sold really, despite my reluctance. I have had a few people try her, some completely nervous despite the fact I asked for experienced/professionals only and others rode brilliantly but she wasn't quite the right horse for them, which I understand. I have had a huge number of inquiries and many people wanting the perfect, bombproof yet competition perfect 6yo mare who's not at all mareish, comes with all tack, long trial period and for virtually no money at all! Plus all of the ones wanting loans etc etc.

With a full time job, having sat several large (law) exams recently and two horses to keep going (before work) I really can't do them both justice. I have written several posts about which horse I ought to sell etc, and I am still completely torn, but I think she is the one that has to go.

The real point to my message is that a professional showjumper whom I know well (and trust) has come to see her and says she can take her from September. The deal will be that I want a certain amount of money, but the SJ'er will take any excess money that she can get for the horse. She will pay all costs for keep etc, I will just insure her and take any veterinary risks. Sounds fair enough. This is a fairly traditional way of doing things, but one which might work quite well for both of us, as I can only really keep both horses at the expense of lessons and competitions etc, which is not much fun and I am pretty sure with a few competitions under its belt, I am pretty sure this horse will be worth a fair bit more than I have asked for from the pro.

So, I've got to draft a contract. The law exams help with this - hurrah! However, I am trying to think of a way that I can do it, so the situation is not indefinite, i.e. I can get the horse back if I need to for whatever reason. I understand that the pro may have increased her value by competing etc and also spent money on her keep, if I needed to recall her after a couple of months say and she hadn't sold her. I was just wondering if any fellow HHO'ers had experienced a similar situation and had an imaginative way of dealing with a sales agreement. Would love to hear what you think!

Not necessary to post comments on opinions of pros riding your horse etc...

And you can see a couple of videos here, if you would like to see how she's progressed: https://www.youtube.com/channel/UClaBeWTHuyjMYhLWvIeIgFQ

 

[Darremi]

I just finished the LPC too!

You would probably have to refund the pro the cost of keep if you decided not to sell the horse. The pro is banking on the proceeds of sale in order to recoup those costs after all.

In that situation the pro would probably also want remunerated for the increase in value. But it all depends on what the pro is prepared to agree.

 

[be positive]

I think to enhance her value the pro will possibly want longer than a couple of months, you need to have a realistic but fair time frame in mind, put it in the contract with the ability to review at certain stages, ie every 2 months, if you take her back it is only fair to recompense out of pocket expenses but probably not livery, that is at their risk, you also need to consider who pays for keep if she gets injured and requires some time off.
I take a few to sell, different contracts to suit rather than set rates, if they are not paying livery but I get more if the price goes up then I like to be under no pressure to sell quickly so I can do a better job, if selling on % only then the sooner they sell the better off I am.

 

[jessjc]

Thank you both.

Darremi - so glad the LPC is over!! Do you have a TC?

I totally understand that the pro will want to recoup some costs, although the increase in value point is a tough one, as even though with schooling etc from a pro it is generally understood that the horse is worth more, but if the pro can't sell the horse, then isn't the horse worth nothing/less than expected?

Be Positive - Yep, totally understand that a couple of months is too short, however trying to think of some reasonable reasons for wanting the horse back, but failing. OTH I don't feel I ought to be handing the pro a horse on a plate, it is after all, a horse I have invested a lot of time/money into myself. Completely understand the no pressure to sell quickly. In this instance, there is no pressure from my end to sell quickly, but I understand the commercial pressures that would be on the pro's end. I like the idea of reviews every couple of months.. I was assuming that the contract would be terminated if the horse needed time off for recuperation and so I would get the horse back, bear the vets bills and cost of keep in exchange for any loss that the pro's made in keeping the horse when fit.

I think I ought to draft a rough contract, then sit and have a proper chat to the pro to refine it. It's so much more complicated than I had originally thought! Would love to see any examples of contracts you have used 'be positive', if you would be able to send me (an anonymous) one to have a quick look at as a template?

 

[Goldenstar]

I think perhaps you should agree a monthly amount to cover the costs knowing several pro's who have been royally stung by these type of arrangments what ever you agree between you needs to be fair to both of you .

 

[jessjc]

Of course I would like any contract to be as fair and reasonable as possible. The pro has agreed that I won't have to pay any livery/keep and she will take the excess on the purchase price plus I'll cover any veterinary fees etc but need to think of a way to draft the contract reasonably and so I'm trying to gain perspective on what is "fair" in this instance.

Was thinking last night that another way of doing it is to see if the pro would be keen to teach me to improve the value of the horse etc in exchange for creaming the sale price and I would cover keep etc, but not sure this does me too many favours financially.

It's a tough one!

 

[WelshD]

While there is the danger of you changing your mind i think its asking for trouble. If the pro hasnt sold your horse in two months it doesnt mean its not worth the money they could be playing the 'long game'

I would perhaps ask them how soon they think is realistic to sell the horse on and agree that you wont take the horse back in that timescale. If the horse doesnt sell by the end of the agreed time you reserve the right to have the horse back by paying x amount for the training. This should give the pro some incentive to sell.

I dont think you should habe the right to take the horse bavk at any time - if your heart hasnt nade this decision then dont enter the agreement full stop

The other option is to sell outright to the pro now for a reduced sum, that way any heartache over the horses progress, increase in value, new owner simply arent your problem

In the nicest possible way it sounds like you suspect the pro may improve the horse to an extent where you may be tempted to have the horse back - if this is the case perhaps you are selling the wrong horse?

 

[jessjc]

Welsh D - Thank you, definitely a good idea for 4 or 5 month review I guess (would have to chat to pro) and sum of money if wanted it returned. No, I am not wanting the pro to improve the horse so that I can have it back. If I could afford to keep the horse for the long term then I would do the improvement myself, as I have done over the past few months.

I'm just cautious as anyone should be when preparing a contract, that you get it right and have thought of everything. The pro gets a very good deal if they can take the horse with none of the risk (i.e. I pay vets bills and deal with it if something goes wrong) and yet I don't have any chance to get the horse back (ever) should circumstances change for me in the future. Of course I would have good discussions with the pro about their intended plan to sell etc and go into the agreement after a lot of thought.

Might just turn the horse away over the winter and pick her up again to sell next spring, we'll see. Worth thinking about this option first though. Thanks for all of your input, it's been really useful to get peoples' views and know what people see as reasonable.

 

[Red-1]

I think the pro is offering a very good deal, and you don't stand to lose much other than the interest you would earn if the cash were sat in you bank (about half a percent if you are lucky at the moment!).

I do agre that there needs to be an "end game" though.

The answer seems simple to me, after 6 months if you decide that you cannot wait then the pro has the option to buy the horse for the agreed fee. This is fair to both parties, as the pro has first choice.

If they do not want to do that then you have the horse back, less a fixed amount per week for keep. I would have that as a reasonable cost though, as if the pro does not want to buy the horse at the agreed fee I would suspect that something has gone wrong in training.

I would also make sure insurance will cover your new arrangement.

6 months would seem like a fair term for the pro to either find a buyer, or to decide to buy themselves.

 

[jessjc]

Thank you Red-1, that sounds sensible..

 

[Darremi]

Thank you both.

Darremi - so glad the LPC is over!! Do you have a TC?

I start my TC in two weeks! Quite nervous .

I also had another thought regarding your original question. You need to ensure the contract covers the situation where the horse is unable to be sold as a result of a veterinary issue. The pro would lose out in that situation having not charged sales' livery and banking on the sale proceeds for their return.

 

[jessjc]

Good luck with the TC, which firm?

I think both of us are aware that that is the main risk for the pro but you're right it should go into the contract. Feeling a bit more positive about it, I think a good chat to go over it with the pro would be great. Will seriously miss riding this little mare though. Summer 2014 has not been as great as I'd hoped!

 

[sportsmansB]

On the vetting issue- might be an idea to get a full vetting done first so you both know what you are letting yourselves in for
If she failed after 6 months you would be in for a hefty bill to reimburse the pro for livery costs with no sale to get it from...
Al.so a good idea if selling in 6 months or so to have current cert and xrays in case of any grey areas with a potential clients vetting (for comparison purposes)

 

[jessjc]

Thank you sportsmansB. Yes, definitely worth thinking about.

 

[HotToTrot]

Jessjc and Darremi - DON'T DO IT!!!!! Are you both bonkers?! Or, if you must do it, then go Yankee. They at least make no bones about their (inhuman) expectations.

Good luck both, well done on the LPC and hope the training contracts go well.

 

[Darremi]

Jessjc and Darremi - DON'T DO IT!!!!! Are you both bonkers?! Or, if you must do it, then go Yankee. They at least make no bones about their (inhuman) expectations.

Good luck both, well done on the LPC and hope the training contracts go well.

Thank you H2T .

Luckily I picked a firm that already sponsors a British Eventing competition. So at least I have some hope of keeping up my hobby!

 

[jessjc]

Jessjc and Darremi - DON'T DO IT!!!!! Are you both bonkers?! Or, if you must do it, then go Yankee. They at least make no bones about their (inhuman) expectations.

Good luck both, well done on the LPC and hope the training contracts go well.

Hahaha! Thanks HotToTrot... Not quite sure what my plan is just yet. Hoping some sort of eventing fund is going to fall out of the sky sometime soon!