Monday, February 2, 2009
Entering Into Contracts with Minors
Happily, there are a lot of minors (persons under 18 years of age) involved in the horse industry. At Equine Legal Solutions, we're often asked whether a minor can sign a boarding contract, horse lease agreement or horse purchase agreement. The short answer is yes. But, there are reasons why you may not want to enter into a contract with a minor.
Minors Can Back Out of Contracts
In the horse context and in most U.S. jurisdictions, almost all contracts will be voidable by the minor. At any time, the minor can choose to back out of the contract, with no penalty. For example, if a minor signs a boarding contract with a boarding stable, the boarding stable can't hold the minor to the contract. Even if the stable honors its obligations and provides wonderful care for the minor's horse, it won't be able to require the minor to pay board or honor a 30-day termination notice provision. This seems like a very unfair result, especially when the minor has received the benefits of the contract. However, the prevailing legal theory is that minors are particularly susceptible to being taken advantage of, and therefore the law must protect minors who enter into contracts with adults. By making it rather disadvantageous to enter into a contract with a minor, the law effectively protects minors by preventing adults from contracting with them.
Minors Can Enforce Contracts
In contrast, a minor can enforce the provisions of a contract against an adult. So, if an adult enters into a contract with a minor to sell the minor a horse, the adult can't change their mind if they get a better offer. If they do, the minor could sue the adult for damages or for "specific performance" - i.e., legally force the adult to sell the horse to the minor. Again, the legal theory is to discourage adults from entering into contracts with minors, thereby protecting minors from contractual exploitation by adults.
If the Minor Owns the Horse
Often, a minor is the registered owner of their horse. How, then, should trainers, boarding stable owners and other equine service providers handle that situation? The answer is fairly simple: Have the minor's parent or guardian sign the boarding or training contract. Like service provider situations involving leased horses, if the parent or guardian isn't listed on the horse's papers as a registered owner, this fact won't affect the trainer's or boarding stable's ability to enforce the contract.
Minors and Liability Releases
A liability release is essentially a contract. Therefore, if a minor signs a liability release, that signature is pretty much worthless because the minor can void the contract at any time. How, then, can boarding stables, riding instructors and other parties protect themselves against legal claims brought by minors. The short answer is to have the minor's parent or guardian enter into a liability release on behalf of the minor. For added protection, the liability release should include an indemnification clause stating that if any claims are later brought by the minor or on the minor's behalf, the person signing the liability release agrees to pay to defend the person being sued, and to pay the cost of any legal judgment. Equine Legal Solutions offers a wide range of liability releases meeting these requirements, including liability releases specifically designed for situations involving minors.