Hire Purchase & Equipment Lease
6. Contracts for Equipment Hire
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 23 Jul 2015
- A contract for the hire of equipment is an agreement where the owner of an item loans the item to a buyer for a specified term and fee.
- In exchange for the fee the buyer has exclusive use of the item for the period specified in the contract.
- After this time the item must be returned to the owner in a reasonable condition.
- In contrast with hire purchase agreements an equipment hire agreement is not formed with a view to having the buyer take ownership of the item in the future.
- The operation of an equipment hire contract is similar to any other consumer contract. The seller can only hire out items that meet the consumer guarantee requirements of the Australian consumer law. For more information on the consumer guarantees see our Consumer Law topic.
- Lessees (people hiring the item) are also required to comply with all reasonable terms of the contract with respect to payment and return of the item to its owner.
- Payment for the hire of the equipment can be a lump sum or instalments depending on what the parties decide between themselves.
- For valuable items of equipment the person hiring the equipment may need to pay an upfront security deposit to cover any losses that may be incurred by the owner if any terms of the agreement are breached. The security deposit is usually returned when the items are returned to the owner on time and in a condition that is to the owners’ satisfaction.
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