Free Download Equipment Rental Agreement Sample All Formats
Definition of Equipment Rental Agreement
An equipment rental agreement consists of an organization about equipment owned by the lender for example business to another party (customers). For example when you want to lend equipment to someone or your own business/other companies, then the equipment rental agreement is required.
There are some reasons why we should make this document. It sounds so tricky for some people who are just running a business, but it is a necessity. Fortunately, you can download our equipment rental agreement template on this page.
Before we discuss further our template, we have some reasons that you need to know why this document is so important.
- You will be able to know how your equipment is used and where it will be used.
- To make underline whether the renter needs to repair and maintain the items.
- To clarify whether the renter needs to deposit for certain damage during the renting time.
- To clarify whether the renter has a chance to purchase equipment for their own.
When a person is given an option about purchasing the equipment after the period of renting end, the lender can negotiate the price which can be discussed through additional clauses. This means the party that is renting or purchase the equipment has the responsibility to pay taxes, coverage, fees, fuel, fines and so on.
What Are the Types of Equipment Rental Agreement?
There are two categories about the equipment leases, which are as follow:
- Operating Lease – It is a short-term agreement that can be canceled before the expiry date comes. For a business that wants to lend equipment in short terms, they will opt for this agreement and they are able to cancel it with notice. However, this capital lease will be followed by a penalty.
- Capital Lease – This is a long-term agreement that cannot be canceled until the lease period ends. Besides, the lessee will hold the responsibility for maintaining the assets including paying the taxes and insurance.
What Are Included In Our Equipment Agreement Sample?
Just like other equipment agreement samples, our sample also followed general formats and terms of the basic contents of a contract, that includes:
- Lease duration – The lease duration can be managed by the company as well as its costs. For a small business, it is suggested to pick the short term agreement as the need might change quickly.
- Financial terms – This content discusses the payment timelines; the periodic payments and also the last due date, when the lessee can pay it.
- Payment due to the lessor – The payment will be spread over several periods until the expiry dates come.
- The market value of equipment – Knowing the market value will help the lessee understand the insurance costs.
- Tax responsibility – However, it depends on the type of the lease. The lessee needs to understand this to avoid any pitfalls.
- Cancellation provisions – Guidelines agreement for cancellation.
- Lessee renewal option – It contains the guidelines for renewal after the expiry periods.
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