AG LAW
Ag Management
Ch 10 (Txt)
Ch 11 (Wbk)
OBJECTIVES
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Explain how laws are created and where to locate them
Define contract, the types of contracts and the elements of a contract
Understand what kinds of contracts must be in writing
Express knowledge of the statue of frauds and breach of contract
Identify ways to reduce the risk of non-payment
Explain leases and leasing situations
Understand the importance and use of insurance
Define the legal liabilities of farmers and ranchers with regard to
land, people, employees, fencing and animals
Explain the use and importance of livestock pollution laws and
agricultural chemical laws
Understand riparian rights
Know the legal aspects of estate planning
Explain property ownership
Identify sources of retirement income
ASSIGNMENT
Complete the Study Guide for the following
sections Choosing Counsel #1,2,4 and Sources of Law 1-6
p. 162-163
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Leases & Leasing (p.165-168) 1-18
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Answers can be found on textbook page 10-17
Riparian Rights 1-11 (p.175-177)
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Answers can be found on textbook pages 10-6, 10-7
Livestock Pollution and Agricultural Chemical Laws
and Regulations- 1,2,4,6,7,8(p.174-175)
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Answers can be found on textbook pages 10-1 to 10-2
Answers can be found on textbook pages 10-17, 10-18
Due– December 11 end of period.
CONTRACTS
A legally enforceable arrangement or agreement
between 2 or more parties
 4 elements of an enforceable contract
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2 or more legal parties
 Offer and acceptance
 Sufficient consideration
 Public policy or morals are not offended

TYPES
OF
CONTRACTS
Expressed- parties state the terms of the contract
orally or in writing
 Inferred-the actions or conduct of the parties
indicate an intention to contract
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STATUTE
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OF
FRAUDS
Law that requires certain arrangements or
agreements to be in writing to be enforceable
CONTRACTS
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THAT
MUST
BE IN
WRITING
Every agreement, promise or contract to pay
commission for the sale of real estate
Contracts that are for more than 1 year
Promises to be responsible for debt, default or misdoing
of another person
Agreements, promises or undertakings made upon the
consideration of marriage, except for the mutual
promises to marry
A promise of an executor or administrator to pay debts
of the deceased out of their own property
Contracts for the sale of goods above a certain value
unless a portion of the price is paid or part of the goods
are delivered
Land Leases
BREACH
OF
CONTRACT
Failure to comply with the terms of a contract
 In the event of a contract breach the injured party
may

Request completion or payment of compensation
(damages)
 Be entitled to specific performance of the contract
 Agree in advance to the amount of the damages to be
paid if the contract is breached.
 Request the contract be canceled and whatever has
already been provided be returned
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SITUATIONS
PAYMENT
WITH A
RISK
OF
NON-
Crops or livestock are delivered and sold but
payment is not received
 Harvested crops or livestock are contracted for later
delivery
 Harvested crops are delivered for storage only
 Because the sale of farm commodities is a
contract, in every sale there is a risk of nonpayment
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PACKERS & STOCKYARDS ACT
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Requires livestock buyers to pay producers by the
close of the next business day after delivery.
SAFEGUARDS AGAINST NON-PAYMENT
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Deal only with licensed warehousemen, brokers or
dealers
Don’t be deceived by the size or appearance of the
company you deal with
Investigate the financial condition of the buyer before
forward contracting
Demand a scale ticket marked sold or storage with each
load of grain you deliver
Demand payment immediately by a check drawn on a
nearby bank when the delivery is complete
Get a warehouse receipt immediately if you store crops
Be on the lookout for practices that indicate financial
instability
INSURANCE FOR THE FARMER
OR RANCHER
INSURANCE
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Paying a professional risk taker (insurance
company) a small but regular sum of money
(premium) to assume the financial burden in the
case of the unexpected.
USES
FOR INSURANCE
Protects you and your family financially and lessens
the hardship of unexpected economic loss
 Meets your obligation to others who might suffer
injury or loss because of something you did
 Makes it possible for you to take certain risks you
otherwise couldn’t take
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KINDS
OF INSURANCE
Life
 Accident & Health
 Property
 Liability
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5 POINTS TO REMEMBER
INSURANCE
1.
2.
3.
4.
BUYING
Insure against those losses that may lead to
financial disaster.
Insure the irreplaceable or most necessary
property first.
Don’t insure anything you can easily afford to
replace yourself
Be sure you have adequate coverage.
1.
5.
WHEN
Property may go up in value so coverage that was
adequate 5 years ago may not be so today.
Buy insurance that provides coverage for situation
in which you are likely to have a claim.
LEGAL LIABILITIES OF FARMERS
& RANCHERS
LEGAL LIABILITIES
Laws may affect farmers and ranchers more than
they do the average citizen
 Property may be seized to pay for damages
 Farmers and ranchers net worth is invested in
agricultural land, making them more vulnerable
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NEGLIGENCE
The omission by an individual to do something
which a “responsible” person would do under
similar circumstances
 OR
 Failure to use reasonable care under the
circumstances
 Examples- Failure to fix a hole in a barn floor, or
keeping fences in such poor repair that livestock
are able to roam free
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LIABILITIES WITH REGARD TO
LAND
ADJACENT PROPERTY
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Farmers and ranchers must exercise reasonable
care to prevent injury or property damage to a
neighbor
INVITEES
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A person who is on your property with your consent
and for your benefit or your mutual benefit
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Examples- A person who comes to your farm to
purchase garden vegetables or eggs or a hunter who
pays a fee to hunt.
Responsibilities to an Invite
Warn them of known hidden dangers
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Inspect your property for hidden dangers
Examples of Invitees
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If injuries are suffered from these known hidden dangers you
are the liable party.
Salesmen, Postman, repairmen, independent
contractors and their employees, prospective buyers
Social guest are not considered invitees
LICENSEES
Someone who comes onto your land solely for their
own pleasure, benefit or convenience
 Responsibilities to a licensee
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Warn them of any known hidden dangers
 You have no obligation to make the land safe for them
nor must you inspect the property to make it safe for
them.
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Examples of Licensees- Hunters who come onto
the property hunt but do not pay a fee.
TRESPASSERS
Someone who is neither invited nor desired on your
land
 You are only liable for injuries to a trespasser if you
personally inflict them
 You may use reasonable force to remove a
trespasser but not deadly force
 Deadly force may only be used to remove a
trespasser if your life or the lives of your family are
being threatened
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DOCTRINE
OF
ATTRACTIVE NUISANCE
If you negligently keep an object or condition on
your property that is attractive to children and
dangerous to children you will be held liable if a
child is injured by that object or condition
 For this to apply
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The landowner must know children trespass where the
object or condition is located
LIABILITIES
OF
EMPLOYERS
3 LEGAL CLASSIFICATIONS
EMPLOYEES
Employees
 Agents
 Independent Contractors
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OF
EMPLOYEE
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A person who is directed and task are controlled by
another person
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Example- A general farmhand with little training whose
work is supervised by the farmer is an employee.
Employers have the greatest amount of control over
an employee and also the greatest liability for their
actions
LAWS
THAT
APPLY
TO
AG LABOR
Fair Labor Standards Act
 Migrant and Seasonal Agricultural Worker
Protection Act
 Immigration Reform and Control Act
 Occupational Safety and Health Act (OSHA)
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RESPONSIBILITIES
EMPLOYEES
OF
EMPLOYERS
TO
Provide a safe place to work
 Provide reasonably safe tools, machinery and
equipment
 Warn and instruct of dangers that the employee
couldn’t reasonably be expected the discover
 Provide competent fellow employees
 Make reasonable rules for conduct of the employee
while at work
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WORKERS COMPENSATION
Agricultural employees are exempt from this in
most states
 This is due to workers compensation automatically
making the employer liable for injuries to
employees suffered in the course of employment
weather the employer was negligent or not.
 Farm and ranch employers may elect to come
under worker’s compensation statutes by
purchasing a standard worker’s compensation
insurance policy
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AGENTS
Have the authority to transact business or manage
the affairs of the employer
 Employers are responsible for the agents acts while
the employee is doing your work
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INDEPENDENT CONTRACTOR
Person or organization performing a job without
control from an employer
 Cases where employers are responsible for the
negligent acts of independent contractors
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Negligence in selecting a competent contractor
 Furnishing a contractor with faulty plans or
specifications
 Interfering with a contractor
 Hiring an independent contractor to perform a task
which is inherently dangerous
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Example: Aerial application of pesticides.
LIABILITIES WITH REGARD TO
FENCING ANIMALS
LAWS REGARDING FENCING X
No stipulations made for materials used on inside
fences
 Boundary fence laws vary state to state but most
require the following
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Fences must be tight enough to turn livestock
 Divisions fences between property are paid for by each
property owner. The half paid for by each owner is
usually the half on their right-hand side as they stand
looking at the fence division line from their own property.
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State laws regarding fences should be checked first
because most states have their own definition of a
legally recognized fence.
 http://pubstorage.sdstate.edu/AgBio_Publications/a
rticles/ExEx5076.pdf
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COMMON LAWS REGARDING
OF LIVESTOCK FENCES
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USE
Livestock owners who maintain good fences are not
liable for damages caused by livestock
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THE
In this case the owner must not be aware that the
livestock are in the habit of breaking out and must make
an immediate attempt to retake them when they do
break out
When animal’s break through an adjoining owner’s
part of a division fence, and the fence is not in good
repair or is not legally sufficient, the owner of the
animals cannot be held liable for their trespass.
OWNERS OF TRESPASSING ANIMALS
MAY BE HELD LIABLE IF
Animal’s are in the habit of breaking out, regardless
of the condition of the fence
 Fences are defective or insufficient
 Negligence, such as leaving the gate open, causes
the trespass
 Animals being driven along the road get out of
control and enter adjoining fields, even though the
road is not fenced
 Owners that are negligent in maintaining their
fences are held liable for all damages their livestock
cause
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LAWS
IN
REGARD
TO
STRAYS
Landowners or local authorities may confine strays
and care for them
 A reasonable attempt must be made to locate the
owners
 Finder is entitled to make reasonable use of the
strays while they are in their custody
 When the owner comes for strays, the owner must
pay the finder for feed, housing, care and other
costs
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UNCLAIMED STRAYS
The strays become the property of the finder
 The strays are sold at public auction and a
reimbursement is made to the finder for expenses
and the balance is put into county funds
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PEOPLE INJURED
BY
ANIMALS
Animal owners are held liable for injuries caused by
animals in the following cases
 The owner negligently allows or causes the animal
to commit injury
 The owner is aware that the animal is vicious and
the animal inflicts injury upon someone who is not
acting negligently
 *Examples: Biting dogs, wild animals kept as pets,
or any animal capable of inflicting injury that has a
known and vicious nature
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ANIMAL DISEASES
Regulatory control groups help stop the spread of
disease under the supervision of federal and
organizations
 State veterinarians direct the livestock sanitary and
regulatory programs
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BRANDING
AND INSPECTION
Brands are used to identify ownership of animals
 Branding helps reduce livestock thefts
 SD has an ownership inspection area and State
Brand Board that regulates Brand Inspections and
Rules
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PROPERTY
TWO TYPES
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PROPERTY
Real
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OF
Land and permanent improvements on the land
Personal
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Moveable items such as livestock, machinery, bank
accounts, bonds, stock
METHODS
OF
OWNING REAL PROPERTY
Fee Simple
 Co-ownership
 Tenancy in common
 Joint-Tenancy
 Tenancy by entirety
 Life Estate (Life Tenant)
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DEEDS
Documents that show what real property is owned,
who owns it and what method of ownership they
have
 Two types
 Warranty
 Quit Claim
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WARRANTY DEED
Implies at time of delivery of the deed that
 The seller owns the property free and clear of legal
claims such as liens and mortgages, except those
claims specifically mentioned in the deed
 Seller has the right to transfer the property
 Buyer will have quiet and peaceable possession
 Seller will defend the title if anyone lawfully
challenges its legality
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QUIT CLAIM DEED
Imply that
 The seller is only conveying the seller’s rights in the
property
 Seller does not promise he/she owns anything
 Often used to clear titles of property
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TRANSFERRING LEGAL PROPERTY
OWNERSHIP
Wills
 Laws of Descent
 Contracts
 Gifts
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RETIREMENT
BEST RETIREMENT PLAN
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Have several sources of retirement income
SOURCES
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OF
RETIREMENT INCOME
Savings
Employer-sponsored
pension plans
Tax sheltered retirement
plans
Keogh Plan (HR-10)
Simplified Employee
Pension Plan (SEP)
Qualified Retirement Plan
(QRP)
Annuity
Trusts
Life Insurance
Social Security
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Continue to operate the
farm/ranch
Rental or lease of
property
Sale of Farm/ranch
US Savings Bond
Commercial Stocks and
Bonds
US Treasury Bills
Nonfarm Investments
School Bonds
Municipal bonds