When a new or existing business wants to borrow expensive machinery or equipment from another company for a specific period of time in exchange of some money as rent, they create and sign a legal contract with each other and it is known as the equipment placement agreement. The key purpose of this agreement is to eliminate the possible conflicts among both parties that might rise in the future and to secure the rights of each party in the joint venture. The most important thing in this agreement is the duration for which the owner is lending the equipment to the client and the compensation that he will get in exchange of lending it.
Brief Description of Equipment Placement Agreement:
It is very common in business and trading world that when a company requires, it can borrow specific machinery or equipment from another company on lease which means the user rights of the equipment are given to the lender but the ownership remains with the legal or primary owner who lend the machinery to the borrower. Companies make such deals all the time but mostly it happens when a company wants or needs a specific equipment for a short period of time and as it can’t afford to buy or pay full price for purchasing the equipment for lifetime, it approaches in the market and invites other companies that have that specific equipment and can lend it to others for short time period in exchange of money or particular services.
When another company approaches the announcer with the equipment that the first company needed, they sign a legal agreement together in order to secure and protect the rights of each other and define the instructions and guidelines along with responsibilities of each party in the deal. With this agreement, the owner defines what rights the lender will have during which the equipment is under his possession along with usage guidelines and instructions to operate the equipment. On the other hand, with this agreement, the lender makes sure that the owner doesn’t increase the lease or rent on the equipment or doesn’t ask to return it before the time period expires as per defined in the agreement.
Key Elements to add in the Equipment Placement Agreement:
- Name of the company/owner of equipment/equipment provider with complete address
- Name of the client/applicant to provider equipment with company details
- Address of the location where the equipment will be placed
- Legal rights and ownership of the equipment
- Responsibilities of both parties with the equipment
- Warranty provided by the equipment provider
- Compensation/rent for the equipment with payment schedules
- Duration to lend the equipment
- Limitations to use the equipment for the lender
- Security of the equipment by the lender
- Resale, replacement and repair of the equipment
- Terms and conditions of the agreement
- Mutually agreed clauses of the agreement
- Termination of the agreement
- Results of violation of the agreement
- Validation and limitations of the agreement
- Signature of both parties i.e. owner and lender of the equipment
Free Equipment Placement Agreement Templates
Download all these Free Equipment Placement Agreement Templates Templates that can easily help you to prepare your own Equipment Placement Agreement effectively.