Get It In Writing: Terms of a Bull Lease
By: Cari Rincker, Ricker Law, PLLC
Leasing a bull definitely has its advantages, however both sides of the lease must be careful that all legalities, terms and conditions of the lease are spelled out to protect both parties. A bull is an expensive and important investment for both parties. Here are a few tips on what should be covered in a bull lease.
1. Condition of the bull– Be clear on what bull is leased and the body condition score of the bull at the time of the agreement. Expectation of maintaining the bulls body condition is an important consideration.
2. Cows to breed — In most cases, bull leases should be clear on which females the bull will be bred to. This will clear up any confusion on the number of cows, if they are virgin heifers or not, and that the bull will not be bred to unapproved cows. Where the bull will be located during the lease is also important.
3. Veterinary Care — It is recommended that the breeder be required to call the bull owner immediately if a medical issue ensues. Items to be decided ahead of time include if there is an emergency, can the breeder use any available veterinarian? Who is responsible for veterinarian bills?
4. Risk of Loss, Injury or Illness – Liability is always a big issue. Who is bearing the risk of loss, death, injury or illness to the bull, other animals caused by the bull, or people caused by the bull? Is there a penalty if the bull is injured (either with or without the fault of the breeder) so as to make the bull unserviceable to other females (including but not limited to him being crippled, unsound, or injured sheath, penis or scrotum)?
5. Insurance – Depending on the value of the bull, it may be insured. Who is responsible for this insurance during the lease and what does it cover? If the bull is injured or dies, what actions need to be taken to fulfill the insurance policy so payment can be made to the owner?
6. Warranty/Guarantee – If a warranty to the bull’s fertility is made, then the bull owner should supply a veterinarian approved and signed “Bull Breeding Soundness Evaluation” as proof that the bull is a “Satisfactory Potential Breeder.” On the other hand, the breeder may require a guarantee that the cows are healthy, vaccinated and free from disease.
7. Term – The length of the lease and options for extending the term should be clear before the bull ever changes hands.
8. Payment – Be specific. What is the lease rate, timing for payment, payment method and instructions and any penalty for late payment. Some bull leases require a security deposit to help insure the delivery of a healthy bull at the end of the term.
There is no “one-size fits” bull lease that is suitable for every transaction. That’s why it is dangerous for cattle producers to pull a form off the Internet, fill in a few blanks, and hope that it’s “good enough.” Bull leases should be carefully tailored for the unique needs of your operation and the circumstances surrounding a particular transaction. It behooves cattle producers to hire an attorney to help craft a suitable bull lease.
Cattle producers can help keep legal costs down by using this checklist and working through all the issues with the other party before consulting an attorney. Even if an attorney is not used, cattlemen should put the terms of the bull lease in writing. For additional considerations on leasing a bull, contact Cari Rincker at Rinckerlaw.com