Episode 158: Legal Basics, Pt. 1

At Good Dog, we want to make sure that your breeding programs are always protected, which is why today’s episode is all about legal basics for dog breeders. This will be a 2-part episode, and today we’ll be focusing on contract basics, lemon laws, breeding rights, and estate planning.

Podcast Transcript:

Nicole Engelman  00:04

Welcome to the Good Dog Pod. Join us every other Wednesday when we discuss all things dogs, from health and veterinary care, to training and behavior science, as well as the ins and outs of Good Dog and how our platform can help you successfully run your breeding program. Follow us and join Good Dog's mission to build a better world for our dogs and the people who love them. Hi, everyone, and welcome back to another episode of The Good Dog Pod where we discuss all things related to Canine health research, how Good Dog helps breeders run their breeding programs, and so much more. I'm Nicole, the Breeder Community Lead here at Good Dog and your host for this week's episode. At Good Dog, we want to make sure that your breeding programs are always protected. Which is why today's episode is all about legal basics for dog breeders. This will be a part of a two part episode and today we're going to be focusing on contract basics, lemon laws, breeding rights and estate planning. And before we dive in, I just want to share a quick disclaimer since I'm not a lawyer, but I was lucky enough to be prepped for this episode by Good Dog’s amazing legal team. So this podcast episode is provided as a resource for general information purposes only. And it shouldn't be taken as any legal advice on any subject matter. And we would recommend connecting with a lawyer in your state if you're able to, since legal advice is dependent upon specific circumstances of each situation, and the law may vary from state to state. Some information in this episode may not be correct for your state or for your specific circumstances. So this is really just for educational purposes only. But we thought it'd be really helpful to bring you this episode today to kind of talk about legal basics as they apply to dog breeders because they can be pretty unique. So the first thing that we're going to dive into is contracts which make up a bulk of a breeders breeding program, it's how you're able to ensure that you're working safely with buyers. So they're super important to say the least. And in its most basic form, a contract is really just reinforced verbal agreement between two or more parties to perform some act now or in the future. So that's a really easy way to think about what a contract does. When you're drafting a contract, it's important to clearly communicate both parties rights and obligations with regards to the dog, it's important to know that if you ever need to have your contract enforced in a court of law, a court can only enforce what the contract actually says. You want to be really specific and deliberate about the things that you are putting into your own contracts, you have to be certain that you're being very clear in the terms that you include and make sure that none of the terms are conflicting in any way that none of them are vague or subject to interpretation. So if you take anything away from this episode, it should be this, be as clear as possible in the contracts that you are putting together, because it not only protects you, but it also protects your buyers so they know exactly what they're agreeing to also. A question that we hear a lot from our community is what's required for a contract to be enforceable. A contract is a legally enforceable agreement between two or more parties, and it should meet the following requirements. So first is agreement, the parties must agree to enter a contract and accept the terms of that contract. This might seem a little bit obvious, but a contract is an agreement and there's no formal contract until both parties have agreed it's just sort of you emailing your form contract to a potential buyer and the buyer isn't signed it or send it back to you, then there's no contract in place, and there's no agreement, so the contract must be signed and agreed upon by both parties. Consideration: that means something of value must be exchanged or promised, both parties need to be getting something in order for the contract to be valid. So in a breeders case, when it comes to pet purchase agreements, you're getting a lifetime home for your dog, and a certain amount of money and your buyer will be receiving presumably lifetime support from you and a dog. Capacity is another requirement for a contract to be legally enforceable. So that means that both parties must be competent. The next would be assent. Both parties' agreement must be genuine. Legality, the contract's purpose must be legal itself. So that seems like a crazy example. but you can't be signing a contract saying that you're going to do something illegal like commit a murder or rob somebody. The contract's purpose has to be legal, and then conditions and requirements. Every condition of the agreement should be listed. Most breeders will impose some conditions on the new owner. This is completely normal. So you want to list every desired condition that you could think of in the written contract because if it's included, it's probably enforceable. So even if it sounds like something you wouldn't find in a normal legal contract, like maybe requiring your buyers to send you photos regularly of the puppies, still include it. If you don't include it, there's no chance that it could be enforceable. So just include as much as you think you need. Some contracts require buyers to provide things like affection even as we've seen before. So definitely think about all of the conditions and requirements that are important to you and include them in your contracts. Next would be guarantees and warranties which are formalized promises made by one party. Guarantees and warranties are basically promises that you are making to your buyer. Typically, your state will have some guarantees and warranties that will apply to you just as a matter of law, you'll have to abide by them whether or not you include them in your contract. So one example of these are pet lemon laws, which we will touch on later. And then another way that your contract will be enforceable is through form and execution. So it should be in writing and signed by both parties. So for breeder purposes, this really just means that the contract should be written and signed by you and your puppy buyers. Technically speaking, a contract doesn't have to be signed in writing in order to be enforceable, but it's always a best practice for it to be in writing, because it's your best proof that an agreement has been made. So making sure to get your contract signed by both yourself and your buyer is super important. And then the last thing we wanted to touch on that is a requirement for a contract to be enforceable is remedies. Remedies are specified consequences if one party fails to meet contract conditions. So the contract can dictate the consequences if one party fails to meet the conditions of the contract. For example, your contract might say something like the buyer has to return the dog if there's a serious breach of contract. A contract can also limit the buyer's remedies or what the buyer is entitled to. And the most important thing to remember when it comes to remedies is that you should always include some remedies for your buyers. If you have no remedies for your buyers, it's more likely that a buyer could challenge the legality of a contract and that you won't be protected. Because courts don't really like to see one sided contracts, they like to see that both parties are getting something out of the deal and that both are protected. So it is really important to include remedies in your contracts as well. And while I'm sharing all of this, I know it can feel a little bit overwhelming to think about what to include in your contracts, what's the best practice. So at Good Dog, we came up with a solution for that, and I just wanted to remind everyone that we have a ton of sample dog contracts that have been drafted by Good Dog's team of lawyers that keep all of the points that I just mentioned in mind. And they are available completely for free in our Legal Resource Center, which is a free resource that is exclusively available to members of our Good Breeder community. So if you want to access those free legal resources, you can sign up to join Good Dog at gooddog.com/join. And I really recommend using those if you're already a member of our community. They're really great contracts that have been drafted by lawyers who understand this space, understand what kind of protections dog breeders need, and most importantly, they're just a really great jumping off point for you to personalize them with the unique needs of your program. But you can know that all of these points that I just mentioned, like remedies, guarantees and warranties, capacity, legality, consideration, the list goes on, those are all reflected in those contract templates that you can then go ahead and personalize. I just wanted to call out that that is a resource that we put together for breeders, and those are always free and available to members of our community. 

Nicole Engelman  08:42

Can parties digitally sign a contract? This is another question that we receive a lot at Good dog. And we built something a little over a year ago now that is a really cool way to make it easier for your buyers and yourself to sign contracts digitally. So on Good dog, you have the option to attach a secure e-contract to every payment request that you make on Good Dog. So after your buyer receives and reviews your e-contract, they can digitally sign it with an e-signature and return it back to you. And the best part about that is these contracts are also stored on your Good Breeder account. And they are stored there for life for however long you want them there. So I know a lot of breeders usually print out their contracts and they have them in filing cabinets, but things can go missing when you have hard copies of them only or you know I've heard stories of puppies shredding up contracts getting into things that they shouldn't so having a digital copy knowing that it's secure on your Good Dog profile and can only be accessed by you is really great peace of mind for breeders and it's a really great backup. Of course if you want to print out those contracts you can. That digital copy will always be stored on your Good Breeder account so you can reference it whenever you need and you don't have to worry about rustling through papers going through a filing cabinet to find it. E-signatures are legally binding and enforceable just like a handwritten signature. So just something to keep in mind that this is a really great substitute for mailing contracts back and forth having your buyers physically sign it. And again, these are all safely stored with your buyers information on your dashboard. So you can access those anytime if you need to. And we're really excited that we're able to offer that because I think it has made the lives of our community members significantly easier since we put it out. And it's just been a really smoother transition to getting those contracts signed in an easier way. Another question we see a lot is breeders wondering, do I need to call it a contract in order for it to be legally enforceable? So this is a really interesting question. And the answer is no. A contract should be given a name or a title, but it does not need to be named a contract. The title of a contract should be concise, and it should reflect the main purpose of the contract. For example, many dog breeders refer to their contracts for the sale of a companion dog as a pet purchase agreement, a puppy contract or a pet Sale Agreement. The term agreement in a title is actually more commonly used than the term contract, but there's no difference in the meaning so you can really name them whatever you like, as long as it is really reflective of the purpose of the contract. Another question that we've gotten is what is a verbal contract and is a verbal contract enforceable. So when two or more parties come to an agreement without any written documentation, they create what's called a verbal contract. Most verbal contracts are legally enforceable as long as they satisfy the requirements necessary for a contract to be enforceable generally, which I just went over earlier in this episode. However, it is typically a best practice to create a written contract in order to avoid any future disputes over a party's obligations. It can be difficult to prove the existence of a verbal contract as well as the terms the parties agreed to. So if you do enter a verbal contract, you might consider sending some form of documentation, whether it's a letter or an email, just confirming the agreed upon terms to serve as written proof that a valid contract was made. What is the contract of adhesion, a contract of adhesion is a contract drafted by one party that typically has more bargaining power than the other party and signed by another party. The party that signs the contract usually doesn't have the power to negotiate or change the contract's terms. And courts generally scrutinize and review these kinds of contracts very carefully, and sometimes void certain provisions because of the possibility that the contract is unconscionable or unfair to the party that lacks the ability to negotiate any terms of the contract. An unconscionable contract is a contract that is so one sided, that it's unfair to one of the parties making it unenforceable. So just something to keep in mind as you were thinking about the terms of your contracts, how equal they are, how balanced, how one sided, and just something to consider as you're putting those together. I mentioned this as we're going through contracts very briefly, but I want to talk next about lemon laws, because this is something that is talked about a lot in the breeder community, specifically puppy lemon laws, so I thought it'd be helpful to dive into what exactly that means. So many states have some version of a puppy lemon law that requires sellers to provide certain guarantees for the puppies that they sell. Usually, the law provides for remedies if the puppy stands to be ill, or carrying some kind of hereditary problem or disease within a certain period of time. Many of these laws include a provision that the rights created by the law are non-waivable. This means that even if your contract was a buyer doesn't mention the lemon law, even if the buyer explicitly states in the contract that they waive all of their rights under the lemon law. Or even if there's no written contracts at all, chances are that if your state has a puppy lemon law, it will still apply to you. About 22 states, including states like New Jersey have lemon laws. Some common remedies that will apply to a breeder if there's an illness, or congenital or hereditary defect include things like replacement of the animal, maybe a refund of the purchase price or reimbursement of that expenses. New Jersey is actually pretty generous to the buyer. Just to give a specific example. A lot of states will cap the amount that you owe to a buyer to the purchase price of the dog. New Jersey caps it at a maximum of two times the purchase price, which is a little more generous than other states have. And again, this varies state by state, so I really encourage everyone listening to this to check your state's law and how that would impact you. It's really important to look up that definition section of your state's law and see what part of the law is going to apply to you. Not just in regards to lemon laws, but just generally it's very important that breeders look at and see where you fit into your state's laws and definitions because, like I keep saying, it can be so different from state to state. So another example in Virginia, they define a commercial dog breeder as anyone during any 12 month period who maintains 30 or more adult female dogs for the purpose of breeding. But some states might classify that as 10 dogs or even five. So if that doesn't reiterate enough, it's just so important to see how you are specifically impacted by your state's laws so that you can be your own advocate, and you can be as prepared as possible for whatever comes your way.  

Nicole Engelman  15:38

Next thing I wanted to shift into talking about, it's a little bit different than lemon laws and contracts is breeding rights. So again, this is a really unique legal aspect to dog breeders. I can't think of anything else off the top of my head that would have something similar to breeding rights. So breeding rights and breeding right provisions are really just tools that you're using as a breeder to control the development of your lines when a dog is sold to a third party. That's in essence, how you can think of what they are. We know that you spent 1000's of dollars and so much time developing your programs. And so regulating breeding rights for any of the dogs that go to puppy owners really helps you control this. So with this one, if you're selling a dog with breeding rights, you want to be careful about promising too much in your contract. You want to make sure that you include a disclaimer that states that a breeding is contemplated, but that the puppy is sold merely as a prospect for that purpose. So I'll repeat that because I want to make sure everyone hears that and understands, you want to make sure in your contracts that you include a disclaimer that states that a breeding is contemplated, but that the puppy is sold merely as a prospect for that purpose. That means there are no guarantees that will actually happen. For example, you might include something like the puppy is being sold as a breeding prospect, which means that in the breeders opinion, puppy shows promise of being worthy of being bred, but due to changes which can occur as a dog matures, there's no guarantee that the puppy will be breeding quality. I know this is very legal jargony, but it really just helps protect you. 

Nicole Engelman  17:12

You'll want to specify things like who's responsible for the costs associated with breeding, whether you'll have approval rights related to the breeding, whether you'll have pick of the litter that's produced, anything that you feel you'll need to include in order to feel protected. And like I said, this is such a unique legal aspect to being a dog breeder, that I would really encourage you to talk to other breeders in your communities, whether it's a good dog’s private Facebook group, whether it's in your breeding clubs, whatever it may be, and see what other breeders who have experience putting breeding rights in a contract have included in the past just to get some inspiration on what's worked for them, as you start thinking about what you would include with your own breeding right provisions.  

Nicole Engelman  17:58

Last thing for this episode that we want to touch on is estate planning. So there are different arrangements that you can put in place to make sure that your puppy or dog is properly cared for in case anything unexpected happens to you. So I know this is sometimes difficult to think about, you don't want to think about anything bad happening to ourselves or our loved ones. But it also can really impact how your dog is taken care of. And it's really just a way to think about being prepared for the unexpected. So the first arrangement that I will touch on is a power of attorney or a POA. This is something that you can put in place to make sure that your puppy or dog will be cared for if you become ill unexpectedly. So one thing to call out is a POA is not an estate planning tool. It's really just something to put in place so a caregiver can have authority to act on your behalf if something unexpectedly happens to you. This can include anything from potential vet care for your dog or your puppy. So just something to think about. You can consider designating a caregiver and replacement caregiver just in case something happens to the initial caregiver you selected. It's also important to note that the POA only gives the caregiver the power to make decisions for your pet on your behalf during your lifetime and not following your death. So you're going to have to still be alive for your caregiver to make decisions. If you want to have measures in place afterwards, you want something more permanent, which I'll touch on next. In terms of things that you can do to make sure that your puppy or dog or multiple dogs and puppies are properly cared for without you, you have a few options. First is more of an informal arrangement, this is something you can enter with your family members, a friend, a vet, a trainer, whoever it may be that's close to you. One thing to keep in mind is this is not a legally binding agreement it means that you're really relying on the person you selected to follow through with any of these wishes that you put forth. If you choose this type of informal arrangement, you want to consider having an extensive conversation with the potential caregiver, about what your expectations are, and make sure that they agree to the role that you would expect them to hold. You also might want to consider having successive guardians in case something unexpected happens to the initial Guardian that you selected. You should also be sure to identify someone that you trust and clearly discuss your expectations for your dog's care. So they can fully understand the responsibility that they're taking on. So ideally, it would be someone that is hopefully already in your dog's life that they know and that they have some kind of relationship with, just so that you know, your dogs are really comfortable with the person taking care of them, and the person taking care of your dogs was also really comfortable with that responsibility. In terms of more formal arrangements, one thing you can consider is a pet trust. So a pet trust is a legal arrangement to provide care for a pet after his owner dies. Typically, you'll create the trust designated caregiver, designate a trustee and the trustee is the person who is responsible for making payments from the trust to be the caregiver on a regular basis. One benefit of a pet trust is you can be very specific in the instructions you leave for the care of your pups, and the trustee will have to follow your instructions. These can include things like the amount of money that should be used on pet care and how exactly the pet should be cared for. Another option is to include a provision in your will. One thing that we want to note is that most states don't allow you to leave money or property directly to your pet, but you can include a provision that will name a guardian to become the owner of your dog or puppy upon your death, and specify money that you're leaving to the guardian to care for your pet. If you use this option, you should make sure you're leaving the puppy with the guardian that you trust since they'll be legally required to follow any specific instructions or use any money left to take care of the pup in a specific way. It's also important to keep in mind that provisions in a will only take effect when your estate is administered. So this can take a bit of time, which means that your puppy or your dog may not have someone taking care of them immediately upon your death. So that is something to think about. There is like a lag period that will take time for it to be enforced. It's helpful to have an informal or other kind of arrangement in place just as a secondary precautionary measure. So in general, with estate planning, like I said, I know it's not exactly the lightest thing to think about, but it really is just a series of precautions and backups that you can put in place. Just so you know that your puppy, your dog, your livelihood, your program is protected no matter what. So again, I know it is not the most thrilling or happy things to think about, but really just reframe it in your mind as a series of precautions and securities that you are taking to keep your puppies and dogs that you love so much safe and that you have many different options in how you can do that.  

Nicole Engelman  23:00

So that is the last legal basic that we will be touching on for today's episode. I want to thank everyone so much for taking the time to tune in to this week's episode. We hope that this information can really help you be your own advocate and most importantly, ensure the future safety of your breeding programs. And I invite everyone to come back next month to hear part two of this episode where we'll be discussing co-ownerships, showing rights, stud dogs, registration rights and health guarantees. Still much much more to cover in the world of legal basics for dog breeders and we hope you'll join us then. 

Nicole Engelman  23:37

Thank you for listening to the Good Dog Pod. We'll be back in two weeks with another episode so be sure to subscribe to the Good Dog Pod on your favorite podcast platform.