Contracts

Contracts – Saving Friendships in the Fancy

By Leo B. Siegel, Esq.
Email: k9esq@flash.net

I purchased a puppy from a good friend who is a breeder and a handler, and who was as well, a trusted friend. We had an oral co-ownership agreement. I agreed to pay my friend all of the costs incurred for his showing this dog until it finished its championship. Full title and possession was then supposed to be transferred over to me. The puppy turned out to be beautiful and very successful in group competition. I want to retire my dog now, but my “former” friend refuses to take his name off of the AKC Certificate of Title or return him to me. How can I recover my dog?

While there are many different types of contracts used in the sport of dogs, one of the most frequent reasons I am consulted by a member of the canine fancy is to resolve a dispute over a contract for the purchase of a puppy, similar to the above scenario. Perhaps the saddest aspect of these matters is they often cause the loss or destruction of friendships that may have existed for decades.

The essayist, Ambrose Bierce, once described a litigant as: “A person about to give up his skin for the hope of saving his bones.” It is not uncommon for the parties in these disputes to spend thousands of dollars before it is over. The consistent use of written agreements drafted by professionals having experience with the issues that are important to members of the fancy would likely resolve most of these matters without the terrific cost of litigation, and maybe even before the friendship ended. This article is intended to provide general information about the contracts used in the sport of dogs.

It was perhaps 35 years ago when I first became involved with show dogs and with people who bred and sold them. At that time, my recollection is that it was rare to find a transaction for the purchase of a dog that included a written contract between the Seller and the Buyer. Transactions and agreements were, for the most part, cemented with a handshake. Sure, an oral agreement is legal, and subject to being enforced. But oral agreements are often extremely difficult, if not impossible to prove. While it is not uncommon for me to run across a written purchase agreement today, I find them so often insufficient to protect the interests and concerns of either party. Let’s face it, the reason we put our agreements in written form is so that the parties’ are clear about their rights and obligations in the relationship, and to better enable a third party (judge, jury or arbitrator) to enforce the terms. It does little good to take the time and effort to put your agreements in the form of a writing, if in the end it is too unclear to be enforceable.

A general summary of the areas that should be considered in the contracts used by the canine fancy for the sale of a dog or puppy would be: (1) the identity of the parties to the contract; (2) the nature of the contract (sale of a dog or puppy, etc.); (3) the date; (4) each parties’ expected duties and obligations (who is to do what, and under what conditions); (5) the financial terms and other terms of payment; (6) Any warranties (purebred, show/pet quality, health, etc.); and (7) remedies in the event enforcement is required. These and other areas will be more specifically treated below.

1. Parties: Obviously, the identity of the parties to a contract should be indicated first. After their initial descriptions (name, address, additional information if appropriate), they may be referred to as “Buyer” and “Seller.”

2. Description of the dog: Equally important is a full description of the subject of the contract. You should include: (1) the breed and sex; (2) the name, if the dog is already registered, and including its AKC registration number, and any tattoo or chip information; (3) identity of the sire and dam, including their AKC registration numbers; (4) date the dog was whelped.

3. Definition of particular terms: The parties may have particular terms in mind that form part of their contractual relationship. For example, the contract may provide that the dog is to be “show quality.” But the Buyer an Seller may each have a different understanding or intent in mind when considering the meaning of that term. This difference in intent may lead to lack of mutual assent that may well be found fatal to any effort to enforce the contract, so particular attention should be paid to defining special terms used in the agreement. The importance of defining the terms and conditions can not be emphasized enough. The reason is that, at least in the State of California, any term, condition or provision that is ambiguous (therefore, subject to more than one interpretation), will be construed against the party who drafted it. The other party’s interpretation of the ambiguous term will be the one given legal effect for purposes of enforcement.

4. Purchase Price and Related Terms: It’s not enough to specify just the price. When and in what form payment is to be made must be considered as well. Is a deposit and subsequent installments being contemplated, or a lump sum payment?

5. Obligations or Duties of the Buyer and Seller: Each parties’ duties under the contract and the trade terms effecting them should be specified. In their most basic form, the duties in a canine purchase agreement are the transfer of possession and title to the dog in exchange for the agreed purchase price. But there is clearly more to these issues than the mere transfer of possession and title. In addition, any conditions to a party’s performance should be spelled out.

6. Title: The parties may contemplate a co-ownership. Full title to the Buyer is sometimes intended to be transferred only after satisfaction of certain conditions, e.g., completion of the dog’s championship, obedience training, title is to be transferred after one breeding with the Seller having a pick puppy, etc. All of these conditions, and others, should be specified in detail. Very often I am consulted to determine if one owner may obtain a lien on another’s title to a dog. At least in the State of California where I conduct my practice, a lien is possible, but only if certain very specific and rigorous requirements have first been set forth in a written agreement.

7. Delivery Issues: The place of delivery of the dog must also be considered. Is the Seller delivering the dog at his expense, or is the Buyer picking it up at a place the Seller specifies. Who is to pay the costs associated with transferring the dog? Does the Buyer have a right to inspect the dog prior to accepting it, and under what conditions, and in what manner can the dog be returned if it is found unsatisfactory?

8. Merger and Integration: This concept involves an indication by the parties that the contract is a to be considered what is referred to as an integration, or the final expression of their agreement. The effect of the integration is that no provisions discussed prior to or at the time the document was signed by the parties will be considered part of the contract. In other words, if a provision is to be part of the agreement, you better make sure it is included in the written contract, or it is quite possible it could not be enforced. Modifications considered after formation of the contract are, however a different matter, as described in the following paragraph.

9. Modifications: The parties should specify the procedures required to effect a modification of their contract. In general, modifications to a written agreement must also be in the form of a writing, signed by the parties to the agreement. Oral modifications may be enforceable, but only under very few circumstances that are beyond the scope of this article. It is always best to put any modifications in the form of a signed writing.

10. Warranties: The warranties provided to the Buyer must be prepared carefully. Many States (AR, CA, CT, FL, MA, MN, NJ, NH, NY, SC, VT, VA) have enacted what are commonly referred to as “Puppy Lemon Laws,” which must, by state law, be taken into account by “breeders,” the definition of which varies under the different state laws. These statutory requirements, as well as more particular warranties related to health of the dog, both physical and genetic, and many other concerns the particular parties have should all be considered.

11. Litigation and Enforcement Remedies: It is not uncommon for the Seller and Buyer to be residents of different states. It should be contemplated and agreed in advance that, should a disagreement arise, which state law is to be used to interpret the contract? Being licensed to practice law only in the State of California, if my clients intend for me to represent them in any dispute over their contract, they are always instructed to include that the agreement will be interpreted under the laws of the State of California, and that venue (the place where any lawsuit or other proceeding may be prosecuted) will lie only in the State of California, in either Santa Cruz County, Santa Clara County or Monterey County.

What then is to happen should either party breach the contract. I like to tell my clients that there is nothing legally, morally, or ethically wrong with breaching any contract, provided that the breaching party is prepared to compensate the other party for any damage resulting from the breach. Since the damage is likely to be extremely difficult to measure in the case of a canine sale, I recommend the inclusion of a provision for what is referred to as “liquidated damages.” The parties agree in advance on the amount they will be entitled to receive in money damages for any breach. In the State of California, liquidated damages provisions are enforceable, provided they are a reasonable estimate of what the damages are likely to be in the event of a breach and do not constitute a penalty. These provisions tend to keep the parties to the contract quite honest, as neither risks having the liquidated damages provision assessed against him. Drafting an enforceable liquidated damages provision, however, will likely require professional expertise.

An attorney’s fee provision is essential. Many states laws provide that in any proceeding required to enforce the contract, each party will bear its own attorney’s fees unless they have a written contract that specifies the party prevailing in any dispute shall be entitled to compensation for its attorney’s fees incurred in the action or proceeding.

12. Severability and Waiver: In the event a court of law or arbitrator is called upon to interpret your agreement, it is possible for it to be considered void should one of the clauses be found to be illegal or otherwise unenforceable. That is generally avoided by including an appropriate clause providing for unenforceable terms to be severed, so that the remaining aspects of the contract might still be enforced. Also, should either party fail to enforce or waive any particular term on one occasion (e.g., payment of expenses for the dog), the inclusion of an appropriate waiver clause will likely avoid that one instance of waiver to being found applicable to the remaining term of the contract.

Should you prepare your written agreement yourself or have it drafted by a professional? Unfortunately, preparing an adequate written agreement – one that will best protect the parties and insure their intent will be fulfilled – is not generally a simple task. It should be done by the professional, and preferably one having knowledge and experience with the issues that are important to the fancy. That way, you stand the greatest chance of not being placed in the position of having to give up your skin for the hope of saving your bones.

Leo B. Siegel is an attorney whose practice includes all aspects of canine law, especially representation of members of the canine fancy in matters involving their purebred dogs. His clients include owners, breeders, professional handlers, judges of AKC sanctioned events, as well as individual and all-breed clubs. He may be reached by phone at (831) 768-9110 or by email at k9esq@flash.net

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