Lawyer Dale Skelton thinks there are lots of things elk owners can do to avoid legal trouble.
If they don’t, disputes between elk investors and those who board the animals can escalate to court battles, which are “expensive, time consuming and usually unsatisfactory.”
Skelton, a lawyer from Rosetown, Sask., and an elk investor, told producers at the Saskatchewan Elk Breeders Association annual convention that using a detailed contract can avoid unforeseen problems.
“It’s better to try to anticipate the problems and get them down in black and white,” said Skelton. “With that kind of an arrangement, you probably will not end up in court.”
Read Also
Stock dogs show off herding skills at Ag in Motion
Stock dogs draw a crowd at Ag in Motion. Border collies and other herding breeds are well known for the work they do on the farm.
Boarding is widespread in the elk industry. Investors put up money to buy all or a share of an animal, then contract with a producer to care for it. There are many types of boarding arrangements. In some, the investor buys the animal and he and the farmer share the calf or velvet crop. In others, the investor gets all the money from velvet and calf sales, but pays for all the costs of keeping the animal. Generally this includes a daily charge.
Skelton handed out a sample contract covering the main aspects of the latter kind of arrangement. He said farmers need to consider insurance if they plan to board other people’s animals. Losses to one’s own animals can be personally expensive, but losses to someone else’s can be a serious liability.
He offered the example of a boarder who this year had velvet rejected by a buyer because it had thawed and been refrozen. The farmer shouldn’t expect the investor to accept this loss.
“That investor’s going to be looking for someone to compensate him,” said Skelton.
Another scenario is what happens if no money shows up. If a boarder sells velvet to a buyer, but the buyer never pays the bill, who loses the money: the boarder or the investor?
Skelton said he thinks a judge would consider an investor to be liable for the loss, as long as the boarder practised “due diligence” in arranging the sale and treated the investor’s velvet no differently than his own.
However, a much stronger protection for the farmer would be to get the investor to agree to the sale before it is completed. That means the investor has acknowledged his acceptance of the risk.
In another scenario the lawyer asked what happens if the investor shows up too often at the farm, or demands his animals be returned to him at an inappropriate time?
Skelton suggested farmers detail in a contract how much notice investors must provide before they come to see their animals. A producer in the audience suggested the contract should note times when it would be inappropriate to sort out and remove an animal from the herd, such as during calving.
As well, Skelton said an investor should assume that natural or other deaths not caused by the farmer are not the farmer’s responsibility. That could include a bull killed in a fight, or one that wandered away after vandals cut the fence.
Skelton’s model contract specified that all deaths are the responsibility of the owner except for “causes which are determined to be the fault of the ranch.”
The contract also limited the liability of the ranch if the animal died because of neglect. The boarder would be responsible only for the fair market value of the animal, not the unlimited potential it could have.
Skelton told investors and boarders that they should turn to arbitration rather than the courts if they have a dispute.
“It’s fast, it’s understandable, you don’t have to get lawyers involved,” said Skelton.
“It’s fairly quick and certainly less expensive.”
