How to write a rental agreement on equipment

Written by m.l. browne
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There are times when renting equipment makes more sense than purchasing the equipment outright. You may be working on a project that requires the one-time use of a specific tool or other equipment, or you may need to use something that would reduce your project's profit margin if you had to buy, insure and maintain it.

When you make a decision to rent equipment, you must enter into a legal agreement with the equipment's owner to use his property under a specific set of terms and conditions. The rental agreement should be designed to make clear to both you and the equipment owner what is required from each of you. Equipment you need for extended periods (that is, a year or more) is often handled under a lease agreement due to tax considerations, but the basic principles of writing a long-term lease agreement are the same as for the short-term rental agreement.

Skill level:


  1. 1

    Identify the renter and the owner, using full legal names and addresses for each. People who should be contacted in lieu of the renter or the owner should also be named, along with a telephone number to reach them during normal business hours.

  2. 2

    Specify where the rental equipment will be used and stored, and identify the end date of the rental period.

  3. 3

    Provide names, serial numbers, rental rates (e.g., per hour, day, week or month) and the pre-rental condition of each piece of equipment being rented.

  4. 4

    Stipulate the terms and conditions under which the equipment is being rented. The terms should include equipment maintenance during the rental period, the costs of breakage, loss or necessary repairs due to negligence, whether or not the equipment may be used in other locations than the one identified in the agreement, liabilities of usage and what happens in the event that either party defaults on the agreement.

  5. 5

    Provide enough room for both the renter and the owner to sign and date the agreement.

Tips and warnings

  • State who is responsible for what in the rental agreement. The more specific the terms and conditions of the rental agreement are, the less likelihood there is for disagreement or contention between the renter and the owner.
  • It is a good idea to ask an attorney to review the agreement before you sign it if you are writing an equipment rental agreement either for very expensive equipment or a long-term lease.

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