Breeding Loan Agreements© Howard Voren. Click here to use this content.
Q: We have recently become involved in accepting pairs of birds on breeding loan. The owners of the birds are willing to sign a contract so that all parties are protected. Is there any type of standard agreement available? We are afraid that if we write the agreement, we might miss some important points. We would not want to wind up being enemies with the owner over a misunderstanding that should have been agreed to in writing.
A: All too often, the lack of detail or missing points in a written breeding contract will cause extreme heartache for all parties involved. The old saying that “good agreements make good friends” is especially true when it comes to breeding contracts. The May/June issue of Bird Breeder contained an excellent article (“Written Contracts in Aviculture,” by Lawrence T. Ring) on the subject, as well as a sample contract. As explained in the article, there are many details that may vary from one contract to another, due to the individual needs of the parties involved. Some of the most common questions that come up, as well as some of the things that are most often overlooked, are as follows.
What minimum time period is fair? One or two years can pass with little or no production once a “proven pair” of larger birds has been moved to a new environment. Mature pairs that have never bred before will often take at least three years before they start producing. Due to these problems, a period of five years has become an industry standard for the “fair” length of a breeding contract. This can be lengthened or shortened according to individual circumstances.
Most often, when one hears about a problem with a breeding loan, it is a situation where the owner of the birds feels abused by the breeder. In many cases, it is the reverse. It is not uncommon for a “clever” owner to convince an inexperienced aviculturist to take on a group of pairs that are nowhere near breeding age. The result is that five years later, the owner has the right to walk off with the group of fully mature and ready-to-breed pairs; pairs that are now worth taking back home to set up and breed. This, of course, has been accomplished at the expense of the novice breeder. A five-year contract for a pair of yearling greenwinged macaws, for example, is too short and unfair to the breeder. Just as the pair became mature enough to produce, the owner would have the right to walk off with them.
On the other hand, in certain circumstances, a contract of less than five years would be acceptable. I was willing to advise a friend to accept a two-year agreement on some conures. The pair were extremely prolific. He was able to move them-cage, nest box and all-2 miles down the road to his farm and place them in an area by themselves. Two years later, when the owner took them back, the breeder felt that he had made more than a fair return for his expense and efforts. Whether you increase or decrease the industry standard of five years should depend on what income the pair can be realistically expected to produce in a particular time frame.
Who pays the veterinary bills in case of illness? The industry standard is that the breeder should be responsible for reasonable veterinary care, when needed. Problems concerning this can be quite varied. For example, if the pair of birds in question breaks out with a disease in less than a week after transfer and the veterinary diagnosis is psittacosis, the owner should be completely responsible for the expenses involving the cure. Most veterinarians would agree that less than a week is not sufficient time for a noninfected bird to contract the disease and become clinically ill. With this set of circumstances, it would be logical to assume that the birds were harboring the disease before transfer, and the stress of the movement caused the breakdown.
A clause that states at what point in time the breeder assumes all financial responsibility for veterinary care of the pair should be part of the contract. The owner of the birds must also consider-in realistic terms-the ramification of the breeder being responsible for all vet expenses. It is an unfortunate reality, but there are times when a veterinarian must ask a client, “To what lengths do you want to go to try to save this bird?” This translates into, “How much can you afford to spend?” If breeders know that the owner will help with the expense of “Catastrophic health care,” they can afford to be less concerned with the cost factor in making their decision.
Another aspect that is usually overlooked is the liability of the owner if it is suspected that his birds caused a disease outbreak in the breeder’s aviaries. Most breeding contracts contain a clause that states that the breeder will not be held responsible if the owner’s birds die. Seldom is it considered that the owner of the birds may be held liable for deaths due to disease outbreak that is perceived to be the fault of the birds that were loaned. In order to be fair, there should be a clause that eliminates liability of both parties, in case of death caused by disease.
Another problem can be the split up of the “harvest.” The standard for the industry is a 50/50 split. This is sometimes altered to 60/40 in favor of the breeder if he demands the extra share for taking on the responsibility for the sale of all the offspring. In contracts where the owner is responsible for all of the sales, the split usually remains at 50/50. In agreements where each party will be responsible for the sale of their percentage of the babies, it must be stated how and at what age, the babies will be split up. In most cases, it is stated that the babies will be split up alternately: The first baby usually goes to the breeder, the second to the owner, the third to the breeder and so on.
This type of arrangement has caused quite a few problems. It is often perceived by the owner that they are receiving all of the second-rate babies and that the breeder is always getting the “pick of the clutch.” Since there often can be quite an age difference between two siblings, the breeder may have long since sold “his” baby and is still involved in the responsibility of raising the next baby for the owner. It is occasionally perceived by the owner that the breeder does not put in the same effort in raising a sole baby if it is going to the owner of the pair, rather than one of the breeder’s valuable clients.
In most cases, misunderstandings can be avoided if one of the two parties is responsible for all sales and the proceeds are split, not the birds. That is not to say that the other party should not be responsible for the acquisition of clients, if the agreement calls for this. The fact that $2 dollars split equally is always an equitable arrangement is not debatable. When babies are split up, there can often be inequities. Whether these inequities are real or perceived is of no consequence. The fact is that they cause friction.