This is a legal agreement specifying the rights and obligations between the owner of the equipment (lessor) and the person whom the agreement gives the right to possess and use the equipment (lessee). The agreement is tailored to meet both the needs of the lessor and the lessee.
The template of the equipment lease agreement may vary depending on the type of equipment leased or the jurisdiction under which the agreement is signed. The equipment rental lease agreement enables companies rent heavy machinery or equipment for a specific period of time. These agreements are meant to minimize the business upfront costs by allowing the lessee to own and use an equipment for only a limited period of time. Generally, the lessor and the lessee must agree on the terms and conditions that governs the transaction during the rental period.
When and where an Equipment Rental Lease Agreement is required?
On a number of occasions, companies require to use a major equipment. From a financial point of view, purchasing such an equipment may not be prudent. They will therefore opt for a rental option to be able to get that particular equipment. Such a rental option will need to be guided by an equipment rental lease agreement. Just like other standard contracts, these agreements require a closer look so as to avoid incurring a much higher expense or liability than what is required. Getting an experienced contract lawyer is one way of ensuring the company reviews and negotiate the equipment rental lease agreement more effectively. The equipment may be leased from third party brokers, manufacturers or even banks. Leasing gives you the flexibility in terms of payments, tax advantages and protection against non-working equipment.
Elements of a professional Equipment Rental Lease Agreement
The equipment rental lease agreement doesn’t need to be very rigid. It can be customized to fit the needs of the lessor and the lessee. The following elements should be considered when developing a professional lease agreement.
- Equipment – the contract must clearly define the equipment being leased.
- Term – the lease need to be clearly defined whether it is on a month-to-month basis or for a specific period of time.
- Rent – the rent value must be clearly stated within the contract, how long it will last and the payment installments.
- Termination – it is vital to state how the lease can be terminated. This may also include the auto-renewal options.
- Usage limitations – the lessor and the lessee needs to agree on the possible usage limits.
- Insurance – the type of insurance and who is responsible should be agreed upon.
- Transportation and installation – the contract need to specify who is responsible for transporting the equipment and installing it.
- Maintenance – any maintenance requirements on the equipment must be specified.
- Warranty – consider any required state warranties in addition to the legal safety and quality requirements.
Here are some samples and templates we have developed for the Equipment Rental Lease Agreement. You can access them in either PDF or Word format so as to give you a good idea of how to write your own agreement.
Sample of Equipment Rental Lease Agreement
Blank Equipment Rental Lease Agreement Format
Equipment Rental Lease Agreement for Construction
Equipment Rental Agreement Template PDF
Compactor Rental Agreement Template Format
Sample of Gordon System Rental Agreement Template
Equipment Lease Agreement Example
What to include and avoid while writing an Equipment Rental Lease Agreement
In developing a lease agreement, the following components must be included.
- Parties – the persons involved in the lease agreement
- Identification of the equipment
- Terms of the lease
- Amount of rent due
On the other hand, you should avoid generic contracts that don’t explicitly state the specific details related to the equipment leased.