Why You Need a Rental or Lease Agreement

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Table of Contents

• What is the Relevant Law?
• What is a Rental/ Lease Agreement?
• What Will it Cover?
• Conclusion

Commonly, businesses will permit another to use its equipment or goods for a limited time. Businesses can loan or rent vehicles, machinery or even premises in return for money. If you are looking to use another business’ property or propose to rent out your valuable assets, it is prudent to have a comprehensively drawn up rental or lease agreement. This Agreement will set out not only the transaction’s financial aspects but, operational issues such as terms of use, transfer of liability and insurance.

What is the Relevant Law?

General Contract Law and fundamental principles of property ownership developed under the common law govern rental and lease agreements.

What is a Rental/ Lease Agreement?

A rental or lease agreement is a contract the owner of the goods or property (the lessor) enters into with another party who acquires the right to use those goods or property under strict terms (the lessee).

What Will it Cover?

A comprehensively drafted rental or lease agreement for equipment or property sets out:

• The rights and terms of use,
• The remuneration or rental paid to the renter in return for the right of use,
• The liability for the property (particularly in the event of fault or misuse),
• Disclaimers and indemnities and precisely how the lessor will provide the items and the lessee will return them.

A lawyer can also draft the agreement to cover the use of intellectual property, repair and transfer of leasing/renting rights in certain circumstances.

Conclusion

It is sensible to engage an experienced commercial lawyer in preparing your lease or rental agreement. She or he will take your instructions as to the exact items you will rent or lease, as well as the applicable terms and conditions.

Your property is undoubtedly a valuable asset for your business. If you allow a third party to use that property, it should be the subject of a carefully drafted agreement, drafted by an experienced commercial lawyer. LegalVision would be delighted to assist you with drafting or reviewing your rental or leasing Agreement. Questions? Please get in touch on 1300 544 755.