I Run an Event Hire business. How Can I Ensure My Equipment is Not Damaged or Lost?

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Table of Contents

• Equipment Hire Contract
• Security Bond
• Condition and Return of the Event Hire Equipment
• Security Interest
• Key Takeaways

A crucial concern of your event hire business is to avoid equipment becoming damaged or lost. Your marquees, speakers, lights and other event equipment are expensive and keeping them in good shape is essential to your success. In this article, we unpack some key ways to ensure that you do not lose or damage your equipment.

Equipment Hire Contract

To outline the terms of the arrangement with your customers, you should put an equipment hire agreement in place. The agreement should be in writing, to clearly outline the responsibilities and obligations of you and your customers. This will avoid any disputes going forward. 

The equipment hire agreement should cover the key commercial terms of the arrangement, including:

• a description of the equipment that customers hire, including any serial numbers or other points of identification;
• the dates for which your customer will hire the equipment; 
• whether they will pick up the equipment or you will deliver it;
• who will cover the delivery costs; 
• whether you will charge a deposit or bond; and 
• the payment terms.

The agreement should cover the period from when a customer first hires the equipment until they return it. This protects you if your customer brings the equipment back late.

Security Bond

You should ask your customers for a security bond. This is a sum of money that customers pay you before they hire the equipment, which you will give back once they return the items in good condition. The bond acts as insurance against lost and damaged equipment. 

Where customers return your equipment in its original state, you can:

• return the security bond to the customer; or
• deduct the security bond from the full amount of payment, if the customer is paying upon return of the hired items. 

If a customer brings back your equipment damaged or lost altogether, you may charge your customer the full cost of replacing it. You can deduct this cost from the security bond, and have the peace of mind that all, if not some of the cost, will definitely be covered. It also incentivises the customer to look after the equipment.

Condition and Return of the Event Hire Equipment

Keeping your equipment in good working order is essential to the success of your business. Therefore, you should protect yourself from financial responsibility to replace broken or lost equipment by including some key provisions in your equipment hire agreement.

Importantly, you must guarantee the condition of your equipment by holding customers accountable for any damage caused. Therefore, you should give customers an opportunity to tell you if the equipment: 

• is already damaged;
• differs from your description of its condition; or
• is not the right model that they have requested. 

You should also require customers to return your equipment to an agreed location by an agreed time. You may wish to charge an additional fee if they do not return the equipment on time.

Finally, your agreement should make customers responsible for any harm that could occur to your gear while it is in their care, including:

• loss;
• theft;
• damage;
• neglect;
• vandalism; or
• destruction.

Similarly, the agreement should clearly establish that the customer: 

• must immediately notify you of any damage caused to the equipment; and 
• will be responsible for the cost of any necessary repairs or replacement of the equipment.

Security Interest

Another way to ensure your equipment is maintained and returned is to create a security interest under your equipment hire agreement. 

A security interest is a legal right granted to you by your customers to take action in court if they fail to meet any of their obligations under your agreement.

This interest must be registered on the Personal Properties Securities Register and would be enforceable if a customer failed to return your equipment. This would provide legal proof that you legally own the items that they have hired.

Key Takeaways

As an event hire business, ensuring your equipment is not damaged or lost should be a key priority. To address this concern, you should put in place an equipment hire agreement. This could include a security bond and should detail all conditions of the arrangement, including your expectations that customers: 

• maintain the condition of the equipment; 
• return equipment by an agreed date; and
• are accountable for any damage caused.

It is vital to have a concept of what the condition of the equipment is when you hire it out so that your customers cannot claim the gear was already damaged. If you need assistance drafting an equipment hire agreement, contact LegalVision’s contract lawyers today on 1300 544 755 or fill out the form on this page.