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Equipment Rental Agreement

Equipment Description


Equipment Description

What equipment is being rented?How should I describe the equipment?Describe the equipment with the following information: new/used, year, make, model, serial number, colour, or other identifying information.

Equipment

e.g. Used 2017 Caterpillar D5K2 LGP Crawler tractor, serial number CAT129841907429






Your Equipment Rental Agreement

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EQUIPMENT RENTAL AGREEMENT

THIS EQUIPMENT RENTAL AGREEMENT (this "Agreement") dated this ________ day of ________________, ________

BETWEEN:

______________________ of _________________________________
(the "Lessor")

OF THE FIRST PART


- AND -

______________________ of _________________________________
(the "Lessee")

OF THE SECOND PART

(the Lessor and Lessee are collectively the "Parties")

IN CONSIDERATION OF the mutual covenants and promises in this Agreement, the receipt and sufficiency of which consideration is hereby acknowledged, the Lessor leases the Equipment to the Lessee, and the Lessee leases the Equipment from the Lessor on the following terms:

  1. Definitions
  2. The following definitions are used but not otherwise defined in this Agreement:
    1. "Casualty Value" means the market value of the Equipment at the end of the Term or when in relation to a Total Loss, the market value the Equipment would have had at the end of the Term but for the Total Loss. The Casualty Value may be less than but will not be more than the original purchase price of the Equipment.
    2. "Equipment" means ______________________________________________________ which has an approximate value of $____________.
    3. "Total Loss" means any loss or damage that is not repairable or that would cost more to repair than the market value of the Equipment.
  3. Lease
  4. The Lessor agrees to lease the Equipment to the Lessee, and the Lessee agrees to lease the Equipment from the Lessor in accordance with the terms set out in this Agreement.
  5. Term
  6. The Agreement commences on November 12, 2024 and will continue until November 12, 2024 (the "Term").
  7. Rent
  8. The rent, inclusive of GST, will be paid in instalments of $____________ each month, in advance, beginning on November 12, 2024 and will be paid on the first day of each succeeding month throughout the Term (the "Rent").
  9. Use of Equipment
  10. The Lessee will use the Equipment in a good and careful manner and will comply with all of the manufacturer's requirements and recommendations respecting the Equipment and with any applicable law, whether local, state or federal respecting the use of the Equipment, including, but not limited to, environmental and copyright law.
  11. The Lessee will use the Equipment for the purpose for which it was designed and not for any other purpose.
  12. Unless the Lessee obtains the prior written consent of the Lessor, the Lessee will not alter, modify or attach anything to the Equipment unless the alteration, modification or attachment is easily removable without damaging the functional capabilities or economic value of the Equipment.
  13. Repair and Maintenance of Equipment
  14. The Lessee will, at the Lessee's own expense, keep the Equipment in good repair, appearance and condition, normal and reasonable wear and tear excepted. The Lessee will supply all parts that are necessary to keep the Equipment in such a state.
  15. If the Equipment is not in good repair, appearance and condition when it is returned to the Lessor, the Lessor may make such repairs or may cause such repairs to be made as are necessary to put the Equipment in a state of good repair, appearance and condition, normal and reasonable wear and tear excepted. The Lessor will make the said repairs within a reasonable time of taking possession of the Equipment and will give the Lessee written notice of and invoices for the said repairs. Upon receipt of such invoices, the Lessee will immediately reimburse the Lessor for the actual expense of those repairs.
  16. The Lessee may, but is not obligated to, enforce any warranty that the Lessor has against the supplier or manufacturer of the Equipment. The Lessee will enforce such warranty or indemnity in its own name and at its own expense.
  17. Warranties
  18. The Equipment will be used for personal, family or household purposes.
  19. The Equipment will be in good working order and good condition upon delivery.
  20. The Equipment is of merchantable quality and is fit for the purposes it is ordinarily used.
  21. Loss and Damage
  22. To the extent permitted by law, the Lessee will be responsible for risk of loss, theft, damage or destruction to the Equipment from any and every cause.
  23. If the Equipment is lost or damaged, the Lessee will continue paying Rent, will provide the Lessor with prompt written notice of such loss or damage and will, if the Equipment is repairable, put or cause the Equipment to be put in a state of good repair, appearance and condition.
  24. In the event of Total Loss of the Equipment, the Lessee will provide the Lessor with prompt written notice of such loss and will pay to the Lessor all unpaid Rent for the Term plus the Casualty Value of the Equipment, at which point ownership of the Equipment passes to the Lessee.
  25. Ownership, Right to Lease and Quiet Enjoyment
  26. The Equipment is the property of the Lessor and will remain the property of the Lessor.
  27. The Lessee will not encumber the Equipment or allow the Equipment to be encumbered or pledge the Equipment as security in any manner.
  28. The Lessor warrants that the Lessor has the right to lease the Equipment according to the terms in this Agreement.
  29. The Lessor warrants that as long as no Event of Default has occurred, the Lessor will not disturb the Lessee's quiet and peaceful possession of the Equipment or the Lessee's unrestricted use of the Equipment for the purpose for which the Equipment was designed.
  30. Insurance
  31. No insurance coverage for the Equipment is required under this Agreement.
  32. Taxes
  33. The Lessee will report and pay all taxes, fees and charges associated with the Equipment, with the use of the Equipment, and with revenues and profits arising out of the use of the Equipment, including, but not limited to, sales taxes, property taxes, and licence and registration fees. The Lessee will pay any and all penalties and interest for failure to pay any tax, fee or charge on or before the date on which the payment is due. The Lessee will pay any and all penalties and interest for failure to report required information to any taxing authority with jurisdiction over the Lessee or the Equipment. If the Lessee fails to do any of the foregoing, the Lessor may, but is not obligated to, do so at the Lessee's expense.
  34. Notwithstanding any other provision of this Agreement, the Lessee will not be required to pay any tax, fee or charge if the Lessee is contesting the validity of same in the manner prescribed by the legislation governing the imposition of same, or in the absence of a prescribed form, in a reasonable manner. However, the Lessee will indemnify and reimburse the Lessor for damages and expenses incurred by the Lessor arising from or related to the Lessee's failure to pay any tax, fee or charge, regardless of whether the Lessee is contesting the validity of the same or not.
  35. If the Lessee fails to pay any and all taxes, fees, and charges mentioned in this Agreement and the Lessor, on behalf of the Lessee, pays the same, the Lessee will reimburse the Lessor for the cost upon notification from the Lessor of the amount.
  36. Indemnity
  37. The Lessee will indemnify and hold harmless the Lessor against any and all claims, actions, suits, proceedings, costs, expenses, damages and liabilities, including attorney's fees and costs, arising out of or related to the Lessee's use of the Equipment.
  38. Default
  39. The occurrence of any one or more of the following events will constitute an event of default ("Event of Default") under this Agreement:
    1. The Lessee fails to pay any amount provided for in this Agreement when such amount is due or otherwise breaches the Lessee's obligations under this Agreement.
    2. The Lessee becomes insolvent or makes an assignment of rights or property for the benefit of creditors or files for or has bankruptcy proceedings instituted against it under the Federal bankruptcy law of Canada or another competent jurisdiction.
    3. A writ of attachment or execution is levied on the Equipment and is not released or satisfied within 10 days.
  40. Remedies
  41. On the occurrence of an Event of Default, the Lessor will be entitled to pursue any one or more of the following remedies (the "Remedies"):
    1. Declare the entire amount of the Rent for the Term immediately due and payable without notice or demand to the Lessee.
    2. Commence legal proceedings to recover the Rent and other obligations accrued before and after the Event of Default.
    3. Take possession of the Equipment, without demand or notice, wherever same may be located, without any court order or other process of law. The Lessee waives any and all damage occasioned by such taking of possession.
    4. Terminate this Agreement immediately upon written notice to the Lessee.
    5. Pursue any other remedy available in law or equity.
  42. Entire Agreement
  43. This Agreement will constitute the entire agreement between the Parties. Any prior understanding or representation of any kind preceding the date of this Agreement will not be binding on either Party except to the extent incorporated in this Agreement.
  44. Address for Notice
  45. Service of all notices under this Agreement will be delivered personally or sent by registered mail or courier to the following addresses:

    Lessor:

    Lessee:

  46. Payment
  47. All dollar amounts in this agreement refer to Canadian dollars, and all payments required to be paid under this Agreement will be paid in Canadian dollars unless the Parties agree otherwise.
  48. Interpretation
  49. Headings are inserted for the convenience of the Parties only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.
  50. Governing Law
  51. It is the intention of the Parties to this Agreement that this Agreement and the performance under this Agreement, and all suits and special proceedings under this Agreement, be construed in accordance with and governed, to the exclusion of the law of any other forum, by the laws of the Province of Alberta without regard to the jurisdiction in which any action or special proceeding may be instituted.
  52. Severability
  53. If there is a conflict between any provision of this Agreement and the applicable legislation of the Province of Alberta (the "Act"), the Act will prevail and such provisions of the Agreement will be amended or deleted as necessary in order to comply with the Act. Further, any provisions that are required by the Act are incorporated into this Agreement.
  54. In the event that any of the provisions of this Agreement are held to be invalid or unenforceable in whole or in part, those provisions to the extent enforceable and all other provisions will nevertheless continue to be valid and enforceable as though the invalid or unenforceable parts had not been included in this Agreement and the remaining provisions had been executed by both Parties subsequent to the expungement of the invalid provision.
  55. General Terms
  56. This Agreement may be executed in counterparts. Facsimile signatures are binding and are considered to be original signatures.
  57. Time is of the essence in this Agreement.
  58. This Agreement will extend to and be binding upon and inure to the benefit of the respective heirs, executors, administrators, successors and assigns, as the case may be, of each Party to this Agreement.
  59. Neither Party will be liable in damages or have the right to terminate this Agreement for any delay or default in performance if such delay or default is caused by conditions beyond its control including, but not limited to Acts of God, Government restrictions, wars, insurrections, natural disasters, such as earthquakes, hurricanes or floods and/or any other cause beyond the reasonable control of the Party whose performance is affected.
  60. Notice to Lessee
  61. NOTICE TO THE LESSEE: This is a lease. You are not buying the Equipment. Do not sign this Agreement before you read it. You are entitled to a completed copy of this Agreement when you sign it.

IN WITNESS WHEREOF ______________________ and ______________________ have duly affixed their signatures under hand and seal on this ________ day of ________________, ________


______________________________
(Witness)


______________________________
______________________ (Lessor)


______________________________
(Witness)


______________________________
______________________ (Lessee)


What is an Equipment Rental Agreement?

An Equipment Rental Agreement is a contract that sets out the terms and conditions for borrowing specialty equipment or items. It outlines the responsibilities, fees, and specific requirements for the renter and the equipment owner during the rental period.

An Equipment Rental Agreement is also known as an:

  • Equipment rental contract
  • Equipment hire agreement
  • Equipment lease agreement
  • Machine rental agreement
If you’re looking for a more specific contract for lending or borrowing vehicles, use LawDepot’s Vehicle Lease Agreement for a more detailed rental agreement.

Who can use an Equipment Rental Agreement?

An Equipment Rental Agreement can be beneficial in various situations for businesses and individuals.

For example, say you run a business that lends specialty equipment (e.g., agricultural, construction, or cleaning equipment). Creating an agreement will establish the terms you and the renter must abide by.

On other occasions, private individuals lending equipment can benefit from creating an agreement to help maintain a mutual understanding between both parties. For example, if you lend your snow blower to family, friends, or tenants, a contract can outline all the terms and conditions while they borrow it.

LawDepot’s template is available for short-term and long-term rentals to fit both parties’ rental needs in all provinces and territories.

Why should I use an Equipment Rental Agreement?

An Equipment Rental Agreement can be essential whether you’re a small business lending construction equipment or a neighbour letting someone nearby borrow your chainsaw for a few weeks.

Having an agreement in writing holds both parties accountable for their obligations during the rental period. It can continue to act as evidence should one party not keep up their side of the contract and the other has to take their grievance to court.

An agreement further ensures that all the details of the equipment’s value and insurance requirements are in writing should an incident result in damages or loss

What can I use an Equipment Rental Agreement for?

Those renting out equipment can use a contract for a variety of items, including but not limited to: 

Equipment Examples
Vehicles
  • Cars and trucks
  • Moving vans
  • Dump trucks
  • Camping trailers and RVs
  • Motorcycles
Heavy machinery and power tools
  • Farming equipment
  • Landscaping tools
  • Snow removal equipment
  • Skid-steer loaders
  • Compressors
  • Excavators
  • Forklifts
Event equipment
  • Marquees and tents
  • Inflatables for kids’ parties
  • DJ booth and equipment
  • Stage sound and lighting
  • Event and wedding decorations
Electronics
  • Audio equipment
  • Soundboards
  • Filming equipment
  • Cameras
  • Computers
  • Monitors
Appliances and furniture
  • Industrial kitchen appliances
  • Catering tools
  • Outdoor grills
  • Upright fridge and freezers
  • Buffet steam tables
  • Dining tables and chairs

How do I write an Equipment Rental Agreement?

LawDepot’s user-friendly template lets you write an Equipment Rental Agreement for your specific province or territory. Our questionnaire prompts you to include the following information:

1. Equipment details

Giving precise information about the rental item is essential for an agreement. These details are needed in case either party disputes the use and condition of the equipment. You’ll need to include:

  • Equipment description (e.g., year, make, model, and serial number)
  • Approximate value of the equipment
  • Equipment use restrictions (e.g., care and management requirements, proper use)

Providing as much detail as possible is essential for creating a solid agreement. Recording the details is also helpful in case the equipment has to be replaced.

2. Rental specifics

It’s crucial to specify each party’s obligations during the rental period. This includes the following:

  • Pick-up or delivery of the rental equipment
  • Return of the equipment
  • Repairs (i.e., specifying whether the renter is responsible for maintaining and repairing equipment)

An agreement should also include the total loss. This means the renter is to reimburse the owner either the casualty value, the market value, or the piece of equipment entirely if the item is lost or damaged. 

Including these critical details in your agreement will protect the renter and owner throughout the rental process.

3. Rental fees 

Next, specify the length of the rental period. This will let the renter have the rental dates in writing for their scheduling while ensuring the owner gets their equipment back for the next renter or their personal use. 

Additionally, having the rental fees in writing gives clear instructions for the renter and clarifies any issues either party may have regarding fees. This includes:

  • Payment frequency (i.e., monthly or weekly)
  • Rental prices
  • Taxes
  • Late payment terms (i.e., grace periods or interest on late fees)
  • Damage deposit

4. Additional rental terms

LawDepot’s Equipment Rental Agreement template also allows you to include additional terms that may apply to your agreement, such as:

  • A purchase option that allows the renter to have the opportunity to purchase the equipment at the end of the rental period
  • A renewal option for the renter to extend their agreement and rental
  • Assignment options that allow the renter or owner to transfer the lease to a new party
  • Tax responsibilities for the renter
  • Any warranties for the equipment (e.g., the renter agrees that the equipment is for their personal use only or the owner affirms the equipment is in good working condition)

Depending on your jurisdiction and the kind of rental equipment, the renter may need their own insurance. For example, renting a vehicle of heavy-duty equipment may require insurance for public liability and property damage. Check your province or territory’s laws for insurance requirements applicable to your rental. 

5. Party details and signing

To finalize your agreement, include the renter and owner's name and contact information. You can select a signing date or leave the date open if you don’t have a date set.

Related Documents:

  • Bill of Sale: Create a document to transfer ownership or private property between a seller and a buyer.
  • Catering Contract: Outline the terms and conditions of a catering service for events like a wedding, seminar, or school event.
  • Cleaning Services Contract: Write a contract to determine the terms and conditions for a cleaning service agreement with a client, whether it's for an office building, retail store, or household.
  • Sales Agreement: Outline the terms and conditions of a sale when purchasing or selling goods and services.
  • Service Agreement: Create a contract tailored to a business relationship between two parties.
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