How To Write an Equipment LeaseWhen you need some equipment for business use or even for household and personal purposes, it may be wise to just lease than make a purchase. Sometimes outright buying is not practical especially if the equipment is intended for one-time use only. Besides, equipment, particularly the heavy-duty ones, can be very expensive and hardly affordable. If you are thinking of leasing equipment, make sure to take some precautions so you will not end up incurring liabilities. Put everything in writing by means of an equipment lease. Here are tips that can guide you in writing an equipment lease:
* Begin with a heading. Write “Contract of Equipment Lease” on top of the document. Indicate the name of the contracting parties (lessor and lessee) in the first paragraph.
* Write the specifications. Include the serial number, type of make, chassis number, kind of motor system and size of the equipment. Give all descriptions necessary by identifying and labeling each part and components. For instance, if you are renting a truck or forklift equipment, write down the number of wheels, doors as well as the size of the body and its capacity.
* Include subtitles. Enumerate each term and condition separately by numbers or bullets. The terms and conditions of the equipment lease must follow immediately after the agreement clause. To illustrate: “Terms and Conditions of Lease” (title) followed by subtitles: I – Purpose of Lease, II – Duration of Lease, III – Use and Care of Equipment, IV - Absolute Availability Clause, and so on. Under each subtitle, expound on the stipulations and specifications involved in the equipment lease.
* Express the rental amount in words and figures. One cardinal rule in writing contracts is to translate figures or numbers in words for a clear and error-free agreement. If you fail to write the numbers in word form, there may be some discrepancies and causes for doubts later on which could otherwise be easily resolved if the numbers were explicitly written in words.
* Clarify the commitments. Use the title “Obligations” to refer to this section. Under said title, enumerate and explain the responsibilities of each contracting party. Delineate properly the obligations of the Lessor and Lessee. For example, distinguish who will be responsible for the repair and maintenance of the equipment and identify if it is the Lessor or the Lessee who should be accountable in case of damage and loss.
* Specify the indemnities. In contracting an equipment lease, the owner of the equipment naturally wants to protect his equipment from any untoward incident. Hence you should stipulate in the contract how indemnities are going to be recovered in case the equipment suffers certain incidents. The same thing applies to the Lessee, in which case he has the right to demand payments or reimbursements should there be pre-existing defects in the equipment.
* Include insurance coverage. Note the name of the insurance company, the type and amount of coverage.
The format of an equipment lease practically follows the general structure of other lease contracts. You may research online for sample documents or seek a lawyer’s help in executing the deed.
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