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Ask H&H: breeding from loan mares

Jennifer Gordon Smith

21 July, 2008

We only had a verbal agreement with the mare's owner. Who really "owns" the foal and how can we reach an amicable agreement?

LC, Cumbria

"GENERALLY, a foal will belong to the owner of the mare," said Stuart Farr of Laytons Solicitors.

"But, as this example clearly demonstrates, in cases where mares are loaned out and then used for breeding, the position can become complicated.

"Owners in similar cases may argue that a decision to cancel a loan agreement and return a mare, for whatever reason, has brought the relationship to an end," explained Stuart.

"As a consequence, there is a danger that the person who took a mare on loan may have waived their rights to any foal unless it can be shown there was a clear agreement to the contrary. Even so, subject to what is agreed, it may still be possible to claim a part-share in the foal or recover the expenses incurred if, in particular, the owner did not pay for the mare to be covered.

"Even if the owner accepts there may be a valid claim to full or part ownership of the foal, the owner is under no legal obligation to accept an offer to pay expenses. Once a mare is back in the owner's possession, the owner may exercise a right to keep the foal — a lien — until a reconciliation is agreed. However, a lien does not necessarily carry with it an automatic power of sale if the expenses are not paid at a later date."

According to Stuart, there may be ways to resolve such disputes if direct discussions don't work.

"Mediation is proving popular, especially in cases where the likely legal costs associated with a claim may exceed the amount in dispute," he said.

"However, legal advice should be sought as to the best way to manage any dispute."

Lucy Jay from law firm Travers Smith added that this case clearly demonstrates the importance of putting in place a comprehensive written agreement when loaning a horse.

"Such agreements should cover all eventualities so that, when a dispute arises, as in this case, the parties' respective rights and obligations are clear," she said.

"Breeding arrangements can turn out to be extremely problematic. For example, what happens if the mare dies during labour, or if the loanee wishes to return the mare before the foal has been born? A written agreement could set out what was to happen in all such circumstances, as well as more basic terms as to ownership of the foal, duration of the loan or lease, care of the mare during pregnancy and insurance."

Information

Laytons Solicitors Tel: 0161 8342100 www.laytons.com

Travers Smith Tel: 020 7295 3000 www.traverssmith.com

This Q&A was first published in Horse & Hound (19 June, '08)

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