The Equipment Lease Agreement is used when equipment is being rented from a lessor (person or entity who owns the equipment) to a lessee (person or entity intending to use the equipment on rent).
The lessee gets the right to use the equipment and, in return, makes the rent payment. However, the Lessor retains ownership and the option to cancel the Lease agreement in accordance with the terms of the Lease Agreement.
The Equipment Lease Agreement can be used for business or personal use. It can be utilized for renting any type of equipment, including heavy machinery, computers, servers, etc.
No, it is not mandatory. However, having a written Equipment Lease Agreement will help both parties understand the clear terms of use and avoid potential legal disputes in the future.
Any individual above the age of 18 years, or registered a legal entity can enter into an Equipment Lease Agreement. If the signatory is a business, the person signing the Equipment Lease Agreement must have proper authority in the form of a power of attorney or board resolution.
The completed document should be provided to all parties. Each party should be given the opportunity to read the agreement and may need some time to do this given the length of the document.
The Equipment Lease Agreement would need to be printed on non-judicial stamp paper or e-stamp paper, which is available in certain states. The value of the stamp paper would depend on the state in which it is executed as well as the duration of the lease and the lease rent. Each state in India has provisions regarding the amount of stamp duty payable on the lease deed; the same would need to be determined based on the case's specific facts.
After printing the document on stamp paper or e-stamp paper, as applicable, both parties should sign the lease agreement, and each party should keep a copy of it.
The Equipment Lease Agreement must include the following clauses:
The rules and regulations under the Indian Contract Act, 1872 would be applicable to the Equipment Lease Agreement.
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Equipment Lease Agreement - Template - Word & PDF