Be Sure To Sign A Reasonable Equipment Lease Agreement
If you own a business and have decided to lease equipment of any sort, then you need to shop around for the best leasing company that can arrange the most suitable equipment lease agreement. Before doing this, you need to do some research to ensure that what is on your agreement is standard and acceptable and that there are no additional surprises. By being aware of what to expect, you can avoid any misunderstandings that could cost you money in the end.
A standard equipment lease agreement should contain the leasing company's information as well as your company's details, including address, phone number and contact person. It will also have the complete description of the equipment you are leasing, as well as the agreed upon monthly rate and due date for the rent. It must also include the services offered; whether the installation and delivery are at the expense of the leasing company or you, and how often the equipment will be cleaned and checked. It will then state the term of the lease and if there are any conditions that could break the term contract, such as faulty equipment or not being delivered on the expected date. It will also state if the lease can be cancelled or not at any time, and there should be a disclosure about the protection of the equipment as it remains the property of the leasing company unless at any time you should have the option to buy it. You should also request that the lease contain a warranty of merchantability, which is a promise that the equipment meet a certain set of standards. If this is not included and you sign it, you cannot later file a lawsuit for the equipment quality. Finally, if there are any additional specific terms that you have agreed upon, whether it be scheduled inspections, return of the item or how the equipment is to be used (no illegal actions), it can also be stated in the lease. Anything beyond these sections should not be on the lease, as it should only regard the equipment, payments, terms, responsibilities and consequences of default and nothing more.
One thing the lease agreement will most likely state is that you are responsible for the equipment while it is under contract to you. You may need to have it serviced at your expense, and you must ensure its upkeep and good condition as the leasing company may come to inspect it. You will need to maintain its operating condition according to the supplier's requirements and log any servicing you had done on it. It is essentially borrowed for the period of the lease, so you will need to return it in a similar condition as when you got it.
Your equipment lease agreement should be complex enough that it includes as much as possible to avoid future problems. Stating the lease of equipment, term, rental payments, ownership, responsibility for care, lessor's and lessee's warranties, insurance, taxes, liability for damage and default terms are very standard inclusions on a lease and should be read and understood carefully.
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