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What is Equipment Leasing?
Equipment Leasing An Equipment Leasing Agreement outlines the terms for leasing equipment or machinery, specifying lease duration, rental payments, and maintenance responsibilities.
Sample template:
Equipment Leasing Agreement
1. Definitions
1.1. "Equipment"
shall mean the state-of-the-art, industrial-grade, CNC (Computer Numerical Control) machining center described as approximately 10 feet in length, 6 feet in width, and 8 feet in height, painted in a distinctive blue and gray color scheme with the manufacturer's logo prominently displayed.
1.2. "Lessee"
shall mean the party leasing the Equipment from Lessor.
1.3. "Lessor"
shall mean the party providing the Equipment for lease to Lessee.
2. Lease Duration
This Equipment Lease Agreement ("Agreement") shall commence on the date hereof and continue for a period of _____ (__) months ("Lease Term"), unless terminated earlier in accordance with the terms herein.
3. Lease Rental
3.1. Rental Payments
Lessee shall pay to Lessor, without demand, deduction or setoff, a monthly rental fee of US $______ ("Rental Payments"), payable in advance on the first day of each month during the Lease Term.
3.2. Security Deposit
Lessee shall pay a one-time security deposit of US $______ ("Security Deposit") upon execution of this Agreement. The Security Deposit shall be returned to Lessee, without interest, at the end of the Lease Term, subject to any deductions for damages or unpaid Rental Payments.
4. Equipment
4.1. Delivery and Installation
Lessor shall deliver and install the Equipment at Lessee's designated location at Lessor's expense. Lessee shall provide access to the installation site.
4.2. Inspection
Upon delivery, Lessee shall inspect the Equipment. Lessee's acceptance of the Equipment shall be deemed to have occurred if Lessee does not provide written notice of any defects or nonconformities within five (5) business days following delivery and installation.
5. Maintenance and Use
5.1. Lessee's Responsibilities
Lessee shall, at its expense, maintain and use the Equipment in accordance with the Equipment's operating manual, keep the Equipment in good working order, and prevent any damage, loss or theft thereof. Lessee shall be responsible for all operating expenses, including but not limited to, power, supplies and materials.
5.2. Lessor's Responsibilities
Lessor shall, at its expense, provide all ordinary and extraordinary maintenance and repairs required to keep the Equipment in good working order. Lessor's maintenance and repair obligations shall exclude damage resulting from Lessee's misuse or neglect.
6. Equipment Return or Purchase
6.1. Equipment Return
Upon termination or expiration of this Agreement, Lessee shall, at its expense, return the Equipment to Lessor in good working order, ordinary wear and tear excepted.
6.2. Option to Purchase
At the end of the Lease Term, Lessee shall have the option to purchase the Equipment for a purchase price of US $______ ("Purchase Price"), provided that Lessee provides written notice of its intent to exercise this option no later than sixty (60) days prior to the end of the Lease Term. The Purchase Price is exclusive of any applicable taxes or fees and is subject to adjustment for outstanding Rental Payments and Security Deposit.
7. Title and Risk of Loss
During the Lease Term, title to the Equipment shall remain with Lessor. Risk of loss or damage to the Equipment shall pass to Lessee upon delivery and installation and shall remain with Lessee until the Equipment is returned to Lessor.
8. Indemnity
Lessee shall indemnify, defend and hold harmless Lessor from any and all claims, liabilities, losses, damages, costs or expenses, including reasonable attorneys' fees, arising from Lessee's use, maintenance, operation, possession or control of the Equipment, except to the extent caused by Lessor's breach of this Agreement or Lessor's negligence or willful misconduct.
9. Governing Law
This Agreement shall be governed by, and construed in accordance with, the laws of the United States and the State of [INSERT STATE], without giving effect to any choice-of-law or conflict-of-law rules that would cause the application of the laws of any other jurisdiction.
10. Entire Agreement
This Agreement constitutes the entire understanding of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations and understandings, whether written or oral.
11. Amendments
This Agreement may be amended only by an instrument in writing signed by both parties.
12. Counterparts
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.
IN WITNESS WHEREOF,
the parties hereto have executed this Equipment Lease Agreement as of the date first above written.
LESSOR: __________________________ LESSEE: __________________________
[Insert Lessor's Name] [Insert Lessee's Name]
By: ___________________________ By: ___________________________
[Insert Lessor's Authorized Signatory] [Insert Lessee's Authorized Signatory]
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Sections of an Equipment Leasing Agreement
In this Equipment Leasing Agreement, you will see the following sections:
- Definitions
- Lease Duration
- Lease Rental
- Equipment
- Maintenance and Use
- Equipment Return or Purchase
- Title and Risk of Loss
- Indemnity
- Governing Law
- Entire Agreement
- Amendments
- Counterparts
Going in-depth - Analysis of each section:
- Definitions : This section explains the meaning of important terms used in the agreement, such as "Equipment," "Lessee," and "Lessor." Think of it as a glossary to help you understand the rest of the document.
- Lease Duration : This part outlines the length of the lease, which is the time you'll be renting the equipment. It also mentions the possibility of early termination under certain conditions.
- Lease Rental : Here, you'll find details about the monthly rental fee and the security deposit. It explains when and how these payments should be made, and what happens to the security deposit at the end of the lease.
- Equipment : This section covers the delivery, installation, and inspection of the equipment. It explains who is responsible for these tasks and what happens if there are any issues with the equipment upon delivery.
- Maintenance and Use : This part outlines the responsibilities of both the Lessee and Lessor when it comes to maintaining and using the equipment. It specifies who pays for what and how the equipment should be cared for.
- Equipment Return or Purchase : This section explains what happens at the end of the lease. It covers the process for returning the equipment and the option to purchase it, including the purchase price and any adjustments that may apply.
- Title and Risk of Loss : This part clarifies that the Lessor retains ownership of the equipment during the lease, and the Lessee is responsible for any loss or damage that occurs while the equipment is in their possession.
- Indemnity : In this section, the Lessee agrees to protect the Lessor from any legal claims or financial losses related to the use, maintenance, or operation of the equipment, unless the Lessor is at fault.
- Governing Law : This part specifies which state's laws will be used to interpret and enforce the agreement. It helps determine how any disputes will be resolved.
- Entire Agreement : This section states that the agreement is the complete understanding between the parties and supersedes any previous agreements or discussions about the equipment lease.
- Amendments : Here, it's explained that any changes to the agreement must be made in writing and signed by both parties.
- Counterparts : This part allows the agreement to be signed in multiple copies, each considered an original, but together they form a single agreement.
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