LiveryList Focus On… The Benefit of Livery Contracts

It is now recommended industry standard for livery yard owners to have livery contracts in place between themselves and their livery clients. This is whether you offer basic grass livery, or a fully services bespoke full livery package. Not only will this help you keep proper records of your clients, but also help both parties understand the limit of your services, payments and notice periods, and to have a clear and concise reference point in the event of any disputes that may arise.

Below are some guidelines, and at the bottom of the page, you will find resources relating to the content including additional information and template documents.

A livery contract is not just for the yard owners’ benefit, it is designed to protect and clarify the agreement to the benefit of both parties. Your livery clients should have no genuine reason for not signing an agreement because it protects them too. In theory, anyone accepting your services and making regular payments is already in a verbal contract.

Below we detail just a handful of reasons why a contract should be used:

Make clear what is included and what it costs. A contract should clearly lay out the agreed services and costs for a client’s livery package. The contract should also lay out the payment terms- inclusive of any security deposits or advance payments- and be clear on the due date for payments. A contract should also cover what the process is in the event of late payment, or debt following their departure from the yard. For example, retention of the horse or equipment by way of a lien, or a process through the small claims court should be specific clauses on the contract. This ensures your clients are aware of the consequences should they run up debt with you and fulfils your obligation to advise the clients of your intention to take this path if they owe you money.

It helps you keep records. A contract gives you a formal record of your clients and the horses on your yard. You should have one contract per horse, not per owner. There is important information about your client and their horse that should be recorded on the form: name, address, passport number, passport issuing authority as the very minimum. At the time of receiving a signed contract back from the client, you should also receive their passport (or a copy of their passport if DIY), copy of their vaccinations and a copy of the horse’s insurance. A Horse Details Form is also a good idea as you can then have concise details about the horse, and the owners preferred services such as vet, farrier and another ‘responsible person’. Some yard owners will even go so far as requesting copies of ID and proof of address from clients to ensure they have the correct details of the owner in case there are issues with debt. All this paperwork can be stored in an individual file for each horse which can then be easily referred to.

No one Can Deny a Notice Period. A contract should clearly lay out the terms of notice that must be given if a livery client wishes to leave your yard, so you don’t get left in the lurch with empty stables at short notice. It is generally recommended that a notice period of 30 days is fair for both parties. However, it is worth including a clause stating that in certain circumstances (such as behaviour deemed as gross misconduct- theft, failure to follow rules, negligence etc) that a yard owner can give notice with immediate effect. Of course, if mutually agreeable you can give also be lenient at your discretion to the normal notice period but its best to show a fixed notice period in the contract for clarity. To cover a notice period, it is always recommended for yard owners have clients pay their livery a month in advance and/ or pay an additional security deposit which will ensure the client is paid up to the end of the current month, and can be retained in the event of their failure to give adequate notice.

It helps you clarify your yard rules. A contract is a great way to clearly communicate to your clients the terms of their livery and of your expectations of them whilst on the yard. It is a great way to make your livery clients aware of any specific rules at your yard (such as biosecurity procedures, no under 16’2, no dogs, etc) and for clients to formally acknowledge and accept these rules by signing the contract. Remember, any rules detailed in a contract are contractual obligations, and failure to adhere to these can warrant notice being given. It is important not to fill a contract with too many minor details. To prevent a livery contract becoming too lengthy, alongside a livery contract you can also provide your clients with a ‘Yard Handbook’. This can be a more detailed and lengthier guide to the yard rules and procedures that your clients can refer to as and when necessary and is much easier to review and update than issuing revised contracts. If this is provided, you should also include a clause in your contract for your client to acknowledge receipt of this.

It helps everyone know where they stand with regards to care of the Horse. A good contract will make clear your responsibilities as the yard owner, the responsibilities of the horse owner, and help protect you or your staff in claims against you that were negligent in your duties of care. Whilst verbal agreements are acceptable, the fact that a livery contract is accepted and signed by both parties can be used in your case in the event of disputes. You clients will know exactly what provisions and services they are receiving under their chosen livery package. It also clearly lays out the package your client has opted for, and the services included within that package. This can be useful if a client starts requesting additional services within their standard package, are not fulfilling their own yard duties and responsibilities, or claim services are not being fulfilled.

It will help you recoup the cost of damages. A contract can help clarify who is responsible for damage to your yard- if a fence post is broken, stable door chewed or electric fencing torn down and needs replacing at a cost do you as the yard owner pay for this or do you pass all or part of the costs to the livery whose horse caused the damage? Having this laid out clearly in a contract will save any disputes that may arise, and in turn save you necessary costs from damage caused by clients or their horses. It is advised that upon arrival of a new client/ horse, as well as the livery fees a security deposit is also paid. As a suggestion this should be equal to a month’s livery, or at least £100. Then, in the event of any damage to the fencing, stable or other equipment- either during the period of livery or as assessed on departure- a portion of this can be retained to cover the cost of repair. Remember, general wear and tear should not be included, but repeated damage through vices, intentional destruction, or excessive wear and tear can be deducted to enable you to return the facilities to their prior condition.

It can protect your profit. For all-inclusive livery packages- such as full livery or schooling livery- it can help you specify the amounts of feed, foliage, exercise and suchlike included within the standard livery fees (i.e kg of hay or bedding per week, amount of hard feed, supplements, amount of exercise etc) which means you can reasonably increase fees and surplus charges for those who require more without being at a loss by not having this clear with your clients. A generalised term of ‘feed included’ may to you mean basic pony nuts and chaff, but to your client could be misinterpreted as specific or multiple branded feeds and supplements, the cost of which can vary wildly from your allowance. Those who offer ‘ad lib’ often fall foul as they will find on occasions that clients are taking substantially more, thus costing the yard owner more than anticipated. It is also worth including on your contract the ability to review your livery prices annually. So it’s important to ensure you give detailed information about rations and the types of feed, forage or bedding that are included.

It will help you retain your clients. A good contract should help you retain your clients and have less turnaround of horses on your yard. If all livery clients know what to expect, and they agree to abide by the contract when they arrive there will be less disputes and, in the event, that any ‘issues’ arise these could be easily remedied by referring to the contract. It means that from arrival, clients know what services are included, and what they are expected to pay for these on a monthly basis. The contracts shows it all in black and white so there is no excuse that a client didn’t know the cost or what was included.

It can help you cover all eventualities. There are some important points that should also be considered for inclusion on a livery contract. How things will be dealt with following death of the owner, veterinary emergencies or death of the horse, is important. A livery contract should give you authority to carry out certain tasks on a basis of welfare for the horse, such as authorising emergency veterinary treatment or euthanisation in the absence of, or failure of being able to contact, the owner. You may also have clients that do not own their horses, and as such a lien for retaining the horse or equipment would go no way to retrieving losses if they leave with a debt. In such circumstances it’s important to consider a contractual relationship with the horse owner too by way of a guarantor for the livery client. Many situations like this are not deemed important to yard owners as it may never have happened. However, inclusion of clauses like these can ensure if it does happen, there are procedures in place.

It’s good business. Having a contract will convey your business as organised and professional. It will also ward off any unscrupulous clients who do not want to sign a binding contract and do not intend to pay fees nor abide by the rules! The clarification of details within a contract can help you deal swiftly with any problems, recoup any losses and keep good administrative records. These can all help to be a better organised and proactive business. IN addition to this, a good contract should enable you to review it annually. This is a good opportunity for you to review your outgoings and livery costs, and of the packages you offer are working for the business. Costs go up, that’s a fact, as well as inflation so its no good to keep offering the same livery costs year on year when your own costs are increasing or demand for services may evolve. A clause like this will enable you to review and increase your livery packages and charges annually, and ideally give the client’s 30 days’ notice of any increases.

And really the most obvious reason to have a livery contract with your clients is because it is FREE! There is no need to get a costly solicitor to draw up a contract unless you really need to- you are simply writing down what is already covered in a verbal agreement. There are numerous template agreements that can be found online and amended to your exact needs for your yard, clients and circumstances. Other than the cost to print out a few sheets of paper and distribute to your clients the process is easy.

It is quick and simple to introduce a livery contract to your clients new and existing. For existing livery clients simply issue them all two copies of the contract, already signed by you, and a covering letter explaining the reasons for the contract. Advise that this simply lays out the existing conditions they agree to on a verbal basis by being your livery client anyway and that this simply introduces this on a more formal basis to protect both parties. The sign both copies, retain one for themselves and return the other one to you along with copies of any documentation that may also be requested (such as passport, vaccination certificate etc). Give a deadline to ensure they are all received within a reasonable time frame and encourage your clients to speak to you if they have any queries or concerns.

For new clients you can show them a copy of the agreement when they view the yard, and ensure that this is signed and the necessary paperwork given to you within 7 days of them arriving on the yard.

You can find a template livery contract below (more available on YOH Livery Contracts Resource page)

Template Contract Introduction Letter

Livery Contract Template (Detailed)

Livery Contract Template (Basic)

You can find further resources and templates on this topic on the following YOH Resource pages:

Client Administration

Livery Contracts

Business Management and Planning

IMPORTANT

This information as provided above is intended to provide guidance and areas for consideration for those intending to enter into such arrangements, and is best advice to our knowledge at the time of publication following extensive research. Anyone proposing to enter into agreements, processes or actions based upon the information contained herein are advised to carry out their own due diligence to ensure the information above remains current and factual.