Law was made to simplify the lives of people by setting restrictions and forming agreements and contracts. It is also to avoid any confusion in the future. Just like buying a house, rental agreement allows people to rent houses, vehicles, machines, and other things on rent. They rent things for personal or business use.

The rental agreement can be made for both short-term as well as long term, and the format must tend to provide all the terms and conditions. It has to be followed by both parties, i.e. lessor and lessee.

What Is a Rental Agreement?

A rental agreement is an agreement that allows two or more parties to rent property, vehicles, or equipment, from other parties by mutually formed agreement mentioning the terms and conditions to be followed during the period of the lease.

The agreement specifies the date from which the agreement comes into existence in the eyes of the law. And the name of the parties between which the lease will be conducted, collectively known as parties.

When Do I Need a Rental Agreement?

An agreement is necessary, as it legally binds the parties and makes them obliged to fulfill the contract as specified.

Therefore, a rental agreement is necessary in the case of:

  • If the equipment is for a special or particular purpose which is mentioned in the agreement, and the lessee misuses the equipment or the property. The lessor has the option to end the rental agreement.
  • To seek a remedy in case of any dispute arising in the future.
  • To clearly state the maintenance, insurance, and indemnity clause to keep a record in the books maintained by the parties.
  • In case of waiver by any of the parties, the other party gets the option to terminate the agreement or decide.
  • To restrict lessee to use the rented property for some illegal activity, or with any other wrong motive. And if done so, the lessee can be proven guilty.

Therefore, a rental agreement makes it easy for both parties to maintain a healthy relationship. It also obligates the legality of the agreement as well peacefully.

What Can You Use a Rental Agreement For?

A rental agreement can be used by small start-ups and business companies to rent equipment or residential houses for the short-term or long-term.

The sample of rent agreement outlines the terms of rental, like:

  • Property Equipment: Taking a house on rent for staying or for official purposes.
  • Office Rental: The rental of an office or showroom.
  • Factory Equipment: Heavy material equipment like machines, motors, and so on.
  • Event Equipment: Table, audio system, heating system, and so on.
  • Building Equipment: Tower, hammer, axes, and so on.
  • Transport or Vehicle Rental: Motor cars, trucks, and so on.
  • Catering Equipment: Food equipment like a spoon, carchi, glass, plates, frying pan, drum, and so on.

In spite of this, it can also be used to rent various other equipment as specified in the rental agreement. The agreement must also identify the indemnity clause in case of any loss. It should include insurance to cover the risk of damage and specify the manner and duration it can be used for.

What Are Included In a Rental Agreement?

A rental agreement involves mutual consent of the parties involved along with other information covered like:

  • Term of the Rental Agreement: The rental form must signify the duration or period for which equipment or property would be let out to the lessee.
  • Security Deposit: A sample rental agreement must specify the amount of deposit taken as security by the lessor from the lessee. The amount for the same is to be decided by the parties mutually.
  • Payment Terms: A rental agreement must specify the methods of payment and the periodicity of payment.
  • Description of the Property or Equipment: The agreement must specify the name of all the equipment rented, the quantity, as well as the period and cost per equipment. It should also mention the maintenance required. In the case of residential agreement, the furniture and other equipment attached must be mentioned.
  • Subletting Clause: As per the sample rent agreement, the lessor must specify whether the lessee is allowed to sublet the equipment or not.
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The rental agreement is a comprehensive agreement stating all the points mutually decided by parties so that to avoid confusion and to be legal proof in the court to seek a remedy.

Both parties must be competent enough to fulfill the agreement. The rent agreement format of CocoSign is exhaustive of all points that need to be mentioned in a rental agreement.

We provide rental agreement samples for free, to help people form their own agreement template. Also, our website has many great templates for different types of agreements like rental, buying, and so on.


CocoSign represents a wide collection of legal templates covering all types of leases, contracts and agreements for personal and commercial use. All legal templates available on CocoSign shall not be considered as attorney-client advice. Meanwhile, CocoSign shall not be responsible for the examination or evaluation of reviews, recommendations, services, etc. posted by parties other than CocoSign itself on its platform.