Springtime brings greener pastures, warmer weather and, for many seedstock producers, annual spring production sales. Production sales are the culmination of months and years of breeding, calving, growing and fitting into one or two sales per year. These sales bring with them more than just willing buyers and willing sellers. They provide producers an opportunity to see old friends, make new ones and showcase their best genetics. But while operations are usually focused on sale day events, they should also be cognizant of issues that can arise with the presence of bidders, buyers and spectators and consider ways to limit their liability exposure.
Premises liability issues
Most production sales consist of more than just a live auction. They are often paired with an open house, ranch tours, dinners or other promotional events. But what happens when an individual attending one of these events is injured? The extent of liability is generally dependent on which category the injured person falls into – i.e., is the person a trespasser, licensee or invitee?
A trespasser is a person who enters your property without permission. Generally, a landowner owes no duty of care to make the premises reasonably safe for a trespasser (other than to not willfully injure the person) and is not liable for any injuries sustained by the trespasser. A licensee is a person who enters your property with your permission but for their benefit – e.g., someone you allow to hunt on your property without charge. There, the landowner has a duty to disclose any dangerous conditions of which he or she knows that the invitee is unlikely to be aware. Finally, an invitee, sometimes called a “business invitee,” is a person who enters your property for your benefit – e.g., a potential buyer at your production sale. With an invitee, the landowner has a duty to make the premises reasonably safe. This requires the landowner to inspect for and inform guests of any dangerous conditions that would not be readily apparent to invitees and keep the facilities reasonably maintained. This could include, among other things, ensuring the bleachers and seating are well maintained; checking that gates, fences and latches to cattle pens are in good, working condition; and keeping livestock that may be a little “high-headed” separate from the rest of the offering.
In addition to these premises liability concepts, some states have enacted farm animal liability acts. The general purpose of these acts is to encourage livestock activities (such as sales, shows, clinics, competitions and rodeos) by limiting the civil liability of the sponsors and participants involved in those activities. These acts generally protect the sponsors and participants from liability to another person who is injured while participating in a livestock activity if the injury was caused by an inherent risk of the livestock activity. However, these acts do not relieve landowners of liability for failing to disclose a dangerous condition on the premises. And, whether or not the act would apply to someone injured at a production sale would depend on that state’s respective farm animal liability act and the facts of the situation.
Advertisements and representations
To attract customers to a production sale, most breeders start promoting and advertising their sale months in advance. This usually entails videoing and photographing cattle, obtaining updated cattle expected progeny differences (EPDs), putting together sale catalogs and fliers, and posting on social media. It is important to ensure that all information used to promote the cattle and the sale is accurate and not misleading. Federal and state laws generally prohibit false and misleading statements made in advertising. While statements of opinion, such as “She’s sure to be your next champion,” or “This bull is the ideal match for your cows,” are not necessarily misleading, statements of fact – such as the interest in the animal being sold, the animal’s pedigree or what a cow is checked safe to – are all statements that, if inaccurate, could be examples of representations that need to be corrected. However, mistakes happen, and changes can often be made in a supplement sheet that corrects dates of birth, EPDs, sire names, health conditions or other statements made in the catalog footnotes. Even when supplement sheets are made available, making announcements from the auction block prior to the sale of the animal to reemphasize any changes in terms to ensure that the potential buyers are made aware of such changes is important. While preparing your operation’s sale catalog, it may be worth reviewing your sale terms and conditions to ensure you are still adhering to them or whether they need updating.
Conclusion
Like any business transaction, production sales can lead to a myriad of legal issues. However, with proper planning and attention to the issues addressed above, producers can reduce their liability exposure from hosting such an event. Other considerations include but are not limited to maintaining adequate insurance policies and placing your farm or ranch business in a legal entity that limits your personal liability.
This article is provided for informational purposes only. Readers should consult their own professional advisers for specific advice tailored to their needs. Information contained in this article may be subject to change without notice.
