Leasing livestock, rather than buying it, can be a better option for many farmers depending on the situation. Leases are available for different types of livestock and the agreement should include the following clauses:
1. Description of Animals: The lease should include how many of the livestock are being leased and descriptions of the animals, including any special identifying features.
2. Term: The length of the lease should always be specified.
3. Payment: The lease should indicate the amount owed, due date, payment instructions, types of payment accepted, and interest or penalties for late payments.
4. Representations by Owner: For certain livestock, such as bulls, the lessee may want representations by the owner about bull health, body condition score, fertility, and breed registration, amongst other information. Representations and assurances about health of any type of livestock may be desired by the lessee and should be included in the agreement.
5. Care and Maintenance of Animals: Lease should indicate how animal should be cared for including type of feed to be provided and who will be responsible for medical treatments and bills.
6. Delivery and Inspection: Lease should indicate how the animals will be delivered to the lessee, including who will be responsible for the animals during the delivery process and the right to inspect the animals upon delivery.
7. Ownership of Livestock: The lease should state that the lessor is still the owner of the livestock and that this agreement does not transfer title of animal to lessee.
8. Option to Purchase: If the lessee does have an option to purchase the animal at the end of the term, the agreement should clearly state the terms for procedure for providing notice and how much time the lessee has in order to decide whether or not to purchase the livestock.
9. Relationship of the Parties: The lease should specifically state that entering into this lease does not create a joint venture or partnership between the parties or any other formal business relationship.
In addition to these terms, all agreements should indicate terms relating to choose of law, choice of forum for disputes, alternative dispute resolution, confidentiality, and indemnification. Rincker Law, PLLC is prepared to help create leases for various livestock, including bulls, horses, rams, and boars.
Want more information on contracts for the food and agriculture industry? Check out my first book that I co-authored with Pat Dillon, an Iowa agriculture lawyer titled “Field Manual: Legal Guide for New York Farmers and Food Entrepreneurs” available on CreateSpace, Amazon, Kindle and iBooks. You can find out more about this book here. Furthermore, you can check out this extensive outline on common agriculture contracts on my JD Supra page prepared for this Lawline.com presentation.