The widespread network of the internet has made equipment rental services well known throughout the world. People all over the world are taking full advantage of these services in every field.
But, with new services come new ways to trick people and also fraud them. That is why one must know all the basic information about equipment rental agreement. Therefore, information regarding equipment rental agreement will be discussed in this article.
What Is an Equipment Rental Agreement?
An equipment rental agreement is a legal document that the individual or renting firm issues when renting anything. This document contains all the information about both the lessee and lessor’s responsibilities and obligations.
Important terms and conditions are also included in this document along with details about payment and duration of the agreement. It is the lessee’s responsibility to read all the guidelines mentioned in the equipment rental form before signing it. It is to prevent any confusion later.
An equipment rental agreement might have different information depending on the equipment that is to be rented. In case of any disputes between the two parties, this document would serve as legal proof in solving the confusion.
Moreover, this agreement helps the lessor to preserve the value of the equipment and to limit the liability. It is generally a good idea to get the contract reviewed by legal counsel.
What Is Involved In an Equipment Rental Agreement?
The equipment rental agreement is very similar to a general contract of renting. It includes the following details:
- Name and Personal Details: The first thing in all types of agreements is the name, contact details, personal details, and identity proof.
- Equipment: The equipment rental form must clearly mention the nature of the equipment being leased. If the equipment has attachments that can be lost, broken, or stolen, the agreement must have the attachments listed and detailed.
- Term Length: The duration of the rental must be stated in the contract. It can be a short term equipment rental or long term depending on the lessee’s needs. Mostly equipment is rented on a month to month basis.
- Rent: The cost of renting the equipment along with details like payment due dates and acceptable payment methods are mentioned in this part of the agreement. This part also has details about whether the equipment is free rental equipment or not.
- Termination: Conditions under which the lessee can terminate the existing contract should be stated. Sometimes, the customer might have to pay some extra charges for terminating the contract before its expiration.
- Usage Limitations: This part contains details about how the equipment must be handled and where should it be used. The lessee has to strictly follow these guidelines to avoid paying fines.
- Insurance and Warranty Policies: Before taking the equipment, the lessee must provide details about all the defects, scratches, or tears that the equipment might have.
- Transport and Installation: This section would provide details about the person who would transport the equipment to the user and install it. Whom the lessee contacts in case of any malfunctioning of the equipment.
What Can I Use an Equipment Rental Agreement for?
The equipment rental agreement can be used for renting a variety of items depending on the firm providing the equipment. Also, farmers who cannot afford to buy the machinery required can get excavators, forklifts, and other equipment on rent.
Even some factory equipment and tools can be taken on rent. Construction materials like a hammer, table saw, and jackhammer can be rented while people need it.
Furthermore, travelers and campers prefer renting cameras, lights, tents, sleeping bags, and other camping equipment. Some photographers who are learning the basics prefer renting cameras before buying their own cameras. Students also take simple equipment like mobile phones, computers, laptops, and other gadgets.
When Should My Equipment Rental Agreement End?
Generally, the equipment can be rented for a fixed term or indefinitely. The lessee must choose the end of a rental agreement depending on how long the person would require the equipment.
Fixed-term agreements have a fixed ending and the item has to be returned before the expiration of the contract. The equipment can be taken on rent again but a new agreement has to be made and signed.
Indefinite term rental contracts are sometimes referred to as a periodic lease. These are the contracts that renew automatically after a month or year according to the terms and conditions mentioned in the agreement.
These types of contracts don’t have any end date on the contract. The lessee has to terminate the contract once the purpose of renting the equipment is fulfilled. If the agreement is not terminated, then the lessees will have to pay even though they don’t use the equipment.
This type of contract is preferred if the duration of the requirement is unknown.
Equipment rental services are gaining popularity very fast because of how cost-effective they are. People’s lives have become a lot easier due to these services. In the upcoming future, more people would prefer renting different equipment than buying it.
However, CocoSign has some really good sample templates. The best part is that we have templates for almost all types of rental agreements. We also provide great templates for the equipment rental agreement. If you are looking for the template of this agreement, then you must check our website CocoSign.
VII. LATE CHARGES. If any amount of Rent is late under this Agreement of more than [#] day(s) late, the Lessee will be obligated to pay a late fee of $[LATE CHARGE FEE] for each:
☐ - Occurrence that Rent is Late
☐ - Day that Rent is late.
☐ - Other. [OTHER]
VIII. NON-SUFFICIENT FUNDS. The Lessee shall be charged $[NSF FEE] for each check that is returned to the Lessor for lack of sufficient funds.
IX. SECURITY DEPOSIT. Prior to taking possession of the Equipment, the Lessee shall:
☐ - Be required to pay a deposit. The Lessee will be obligated to pay $[SECURITY DEPOSIT AMOUNT] (“Security Deposit” ) for the performance by the Lessee under this Agreement for damages caused by the Lessee or Lessee’s agents to the Equipment during the Lease Term. In addition, the Security Deposit may be applied to any amount owed by the Lessee to the Lessor.
☐ - NOT be required to pay a deposit (“Security Deposit” ).
X. DELIVERY OF EQUIPMENT. The delivery of the Equipment to the Lessee at the start of the Lease Term and returning to the Lessor at the end of the Lease Term shall be the responsibility of the: (check one)
☐ - Lessor
☐ - Lessee
☐ - Shared between the Parties.
XI. OPTION TO PURCHASE. During the Lease Term, the Lessee shall: (check one):
☐ - Have the option to purchase the Equipment in its entirety for $[PURCHASE PRICE]. After payment has been made, title and possession shall revert immediately to the Lessee.
☐ - NOT have the option to purchase the Equipment.
XII. REPAIRS AND MAINTENANCE. If for any reason the Equipment shall need repairs or maintenance due to wear-and-tear, the following Party shall be responsible: (check one)
☐ - Lessor
XIII. INSURANCE REQUIREMENT. The Lessor shall require that the Lessee: (check one)
☐ - Have insurance of the following types in order to rent the Equipment: (check all that apply)
☐ - Disability Insurance. The Lessee shall be required to maintain liability insurance of at least $[ENTER AMOUNT] for workers and other persons that may be operating, handling, or transporting the Equipment during the Lease Term. Such insurance is intended to indemnify and hold harmless the Lessor from any and all wrongdoing in connection with the injury of any person in the operation of the Equipment.
☐ - Casualty Insurance. The Lessee shall be required to insure the Equipment in an amount of at least $[ENTER AMOUNT] for its damage or replacement.
☐ - Other. [ENTER OTHER INSURANCE]
☐ - NOT be required to have or hold insurance on the Equipment. Although, the Lessor shall be held harmless and indemnified from any and all wrongdoing in connection with any injury of any person in the operation of the Equipment.
XIV. ACCEPTANCE OF EQUIPMENT. The Lessee shall inspect each item and part of the Equipment upon delivery and pursuant to this Agreement. The Lessee shall have twenty-four (24) hours from the delivery date to inform the Lessor of any discrepancies. If for any reason the Lessee claims the Equipment was not the same as described under this Agreement, the Lessee shall be able to return the Equipment and obtain a full refund for any Rent, Security Deposit, and any other payments made.
XV. NO WARRANTY. The Lessor makes no warranties, expressed or implied, as to the equipment leased. The Lessee assumes responsibility for the condition of the Equipment.
XVI. RISK OF LOSS OR DAMAGE. The Lessee assumes all risk of loss or damage to the Equipment from any cause and agrees to return it to the Lessor in the condition received, with the exception of wear and tear, unless otherwise provided in this Agreement.
a.) Damaged or Lost Equipment. Unless otherwise provided in this Agreement, if the equipment is damaged or lost, the Lessor shall have the option of requiring the Lessee to either repair the Equipment to a state of good working order or to replace the Equipment with like-equipment and in equal condition. The final decision for approval of any lost or damaged Equipment will be ultimately up to the Lessor.
XVII. TAXES AND FEES. During the Lease Term, the Lessee shall be responsible and be required to pay any applicable taxes, assessments, licenses, registration, or any other fees associated with the handling and operation of the Equipment.
XVIII. DEFAULT. The occurrence of any of the following shall constitute a default under this Agreement:
a.) Failure of Payment. The failure of the Lessee to make a required payment under this Agreement;
b.) Violation of Agreement. The violation of any provision of this Agreement that is not corrected within five (5) business days after written notice has been received;
c.) Bankruptcy. The insolvency or bankruptcy of the Lessee; and
d.) Seizure. The subjection of any of the Lessee’s property to any levy, seizure, assignment, application, or sale for or by any creditor or government agency.
XIX. RIGHTS UNDER DEFAULT. If the Lessee shall default under this Agreement, and without notice to or demand on the Lessee, the Lessor may take possession of the Equipment as provided by law with the right to deduct the costs of recovery, including any attorney’s fees and legal costs, in addition to any repair or other costs to obtain the Equipment and bring to the same condition as the Lessee received upon initial delivery.
XX. ASSIGNMENT. The Lessee is strictly prohibited from assigning or subletting the Equipment in any manner unless written consent is given by the Lessor. In addition, the Equipment may not be used by any person or associate other than the Lessee and their agents, employees, and subcontractors.
XXI. SEVERABILITY. If any portion of this Agreement shall be held invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.
XXII. GOVERNING LAW. This Agreement shall be construed and governed in accordance with the laws located in the State of [STATE].
XXIII. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the Parties. No modification or amendment of this Agreement shall be effective unless in writing and signed by both Parties. This Agreement replaces any and all prior agreements made between the Parties.
XXIV. EXECUTION. Lessee and Lessor each represent and warrant to the other that each person executing this Agreement on behalf of each party is duly authorized to execute and deliver this Agreement on behalf of that party.