An insert in a recent issue of this publication forecasted the growth of the American cattle herd, which reminded me of a matter I handled recently. My client, who does not own much land, purchased a small herd of cows, and then entered into a bailment contract with a neighbor, a large landowner. His intent was to use his neighbor’s services and resources to grow the herd and take advantage of higher beef prices. Unfortunately, it did not turn out that way. In this article, I will point out what my client got right and where he went wrong.
Firstly, the parties did reduce their contract to writing, which is always a good idea, as it memorializes the particulars of their agreement. Furthermore, this contract included such key provisions as identification of the parties and subject property, the length of the term and default. However, it also included a poorly drafted provision addressing risk of loss, which, as it turned out, became the most important provision of the contract. While in the neighbor’s care for 6 months, nearly 20 percent of my client’s herd succumbed to illness and malnutrition, and the ones that did not perish lost an average of 100 pounds. My client ultimately regained possession of his herd, but the damage was done. His hopes for growing the herd were crippled.
As a result, my client had a couple of options. But first, it is important to recognize that his situation involved a bailment contract. Indeed, my client, the bailor, was the owner of the property subject to the bailment, i.e., the herd, and offered up such property to the bailee, the neighbor, who accepted the “bailed” property for the purpose of maintaining and caring for the herd, subject to certain specific agreements between the parties as to feed, medicines, grazing, shelter, etc. The bailee was to be compensated by direct payment for his services, but other arrangements, such as sharing in each year’s calf crop, are also common.
As a bailment is born out of contract, whether written or oral, any dispute may be brought as other contract actions in court. In addition, if the plaintiff is the bailor, he may pursue a negligence claim against the bailee, for neglecting the herd and causing loss. A negligence action may allege general negligence, if the bailor does not know the actual cause of the damage (e.g., the bailee refuses to identify the reason), or specific negligence, if the bailor knows the actual cause of death (e.g., a vet diagnosed the deceased cow with fescue foot, which the bailee failed to address). Of course, if a bailee pursues both contract and negligence claims, he may only receive one judgment for the harm caused.
The moral of this story is that, while reducing an agreement to writing is smart, it must include well drafted provisions that adequately address real life situations, such as risk of loss. In a follow up article, I will explore the rights and remedies of a bailee, when such person has not been paid for boarding and keeping animals belonging to others.
Jerry Potocnik is a licensed attorney in Missouri and Kansas.
