Equipment Lease Agreement - Template, Sample Form Pro · IN-law
✓ Valid in India · drafted to comply with local law
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EQUIPMENT LEASE AGREEMENT
This Equipment Lease Agreement (hereinafter referred to as this "Lease Agreement" or this "Agreement") is made and executed at ________ on this ________.
BY AND BETWEEN
________, holding PAN ________ and Aadhaar/identification No. ________, residing at / having its registered office at ________, Email: ________ (hereinafter referred to as the "Lessor", which expression shall, unless repugnant to the context or meaning thereof, mean and include its legal heirs, executors, administrators, successors and permitted assigns) of the FIRST PART;
AND
________, holding PAN ________ and Aadhaar/identification No. ________, residing at / having its registered office at ________, Email: ________ (hereinafter referred to as the "Lessee", which expression shall, unless repugnant to the context or meaning thereof, mean and include its legal heirs, executors, administrators, successors and permitted assigns) of the SECOND PART.
(The Lessor and the Lessee are hereinafter individually referred to as a "Party" and collectively as the "Parties".)
WHEREAS:
A. The Lessor is the absolute and lawful owner of and is in physical possession of the following equipment: ________ (the "Equipment"), more particularly described in §2 hereof.
B. The Lessee has approached the Lessor for the grant of a lease in respect of the Equipment, and the Lessor has agreed to lease out the same to the Lessee.
C. The Parties are now desirous of executing this Lease Agreement to record the terms and conditions governing the lease of the Equipment as set forth hereinafter.
D. The lease of the Equipment shall commence on ________ and shall continue for a period of ________ (the "Lease Period") unless terminated earlier in accordance with the terms hereof.
NOW THEREFORE, in consideration of the mutual covenants, terms and conditions hereinafter set out, and intending to be legally bound, this Agreement witnesseth and it is hereby agreed by and between the Parties as under:
§1. INTERPRETATION
In this Lease Agreement, unless the context otherwise requires, the following rules of interpretation shall apply:
§2. EQUIPMENT DETAILS
The details of the Equipment leased under this Agreement are as follows:
(a) Equipment name: ________
(b) Equipment type: ________
(c) Brand and model: ________
(d) Serial number: ________
(e) Age of Equipment: ________
(f) Capacity: ________
(g) Condition at the time of lease: ________
§3. GRANT OF LEASE
The Lessor hereby grants to the Lessee the right to use the Equipment for the Lease Period, subject to all the terms and conditions of this Agreement. The Lessee shall use the Equipment in a reasonable and prudent manner in accordance with the manufacturer's specifications and all applicable laws and regulations. It is expressly clarified that this Agreement constitutes a lease of movable property under the Indian Contract Act, 1872 and the Sale of Goods Act, 1930, and does not effect any transfer of ownership of the Equipment to the Lessee.
§4. PURPOSE
(a) The Lessee shall use the Equipment only for the following purpose: ________.
(b) The Equipment shall be used exclusively by the Lessee and shall not be used for any purpose other than as specified above unless otherwise agreed by the Lessor in writing. The Lessee shall not use the Equipment for any unlawful purpose and shall forthwith notify the Lessor if it becomes aware of any illegal activity being conducted using the Equipment.
§5. RENT
(a) The Lessee agrees to pay rent of Rs. ________ (Rupees ________) (the "Rent") calculated ________. The Rent is ________ of Goods and Services Tax (GST) and other applicable taxes. The Lessor shall raise a tax invoice in compliance with the Central Goods and Services Tax Act, 2017 in respect of each payment of Rent.
(b) The payment shall be made at the following interval: ________.
(c) The payment of Rent shall be made via Internet Banking (NEFT/RTGS/IMPS) to the following bank account: ________.
(d) The Rent shall be subject to increase and enhancement after the following period: ________.
(e) The Rent shall be increased at the rate of ________% (________ percent) over the prevailing Rent.
(f) If default is made in payment of Rent by the Lessee for ________ (________) consecutive business days, the Lessor shall be entitled, in addition to all other rights and remedies available under this Agreement and applicable law, at its sole discretion, to terminate the lease and to take possession of the Equipment as the full and absolute owner thereof.
(g) Provided that the Lessor shall first give written notice to the Lessee of its intention to terminate the lease and take possession. If the Lessee pays the arrears of Rent within ________ (________) business days from the issue of such notice, the Lessor shall not be entitled to terminate the lease. If the arrears are not paid within the said period, the lease shall stand automatically terminated without any further act on the part of the Lessor.
(h) Any Rent paid after the due date shall carry interest at the rate of ________% per annum from the due date until the date of actual payment.
(i) The stamp duty payable on this Agreement under the Indian Stamp Act, 1899 (as applicable in the relevant State) and registration charges, if any, shall be borne by ________.
§6. TERM OF THE LEASE
The lease of the Equipment shall commence on ________ and shall continue for the Lease Period of ________, unless terminated earlier in accordance with the terms hereof. Upon expiry of the Lease Period, the lease shall be renewable on mutually agreed terms and conditions, provided the Lessee gives advance notice of ________ prior to the expiry. If no notice of renewal is issued by the Lessee, the lease shall terminate upon the expiry of the Lease Period.
§7. OWNERSHIP
Except for the Lessee's right of use under this Agreement, the Equipment is and shall at all times remain the exclusive property of the Lessor, even if installed in or attached to any real property by the Lessee. The Lessee shall have no right, title or interest in or to the Equipment except as expressly set forth in this Agreement, and the Equipment shall always be deemed to be and remain movable property.
§8. SUBLEASE AND ASSIGNMENT BY LESSEE
The Lessee shall not sublet, assign or otherwise part with possession of the Equipment, either in part or in full, without the prior written consent of the Lessor. Any sublease, assignment or licence without the prior written approval of the Lessor shall be null and void, and the Lessor shall be entitled to terminate the lease at its sole discretion.
§9. SECURITY DEPOSIT
(a) The Lessee has paid to the Lessor an amount of Rs. ________ (Rupees ________) as an interest-free refundable security deposit (the "Security Deposit"), the receipt of which the Lessor hereby acknowledges.
(c) In the event the Lessor sells the Equipment or assigns all rights under this Agreement to a third party (the "New Lessor"), the Security Deposit shall also be transferred to the New Lessor, and the Lessor shall thereafter have no liability towards return of the Security Deposit.
§10. COMPLIANCE WITH LAWS
The Lessee shall comply with all applicable laws, rules and regulations of the Central Government, State Government and local authorities in relation to the use and operation of the Equipment.
§11. POSSESSION
(a) The Lessee shall be handed over possession of the Equipment simultaneously with the execution of this Agreement, provided that an amount equivalent to the Security Deposit and the first instalment of Rent has been delivered to the Lessor.
(b) If the Lessor is unable to hand over possession on the agreed date due to unforeseen circumstances, the Lessor shall not be liable for any damages, but the Lessee shall not be liable to pay Rent until possession is given.
§12. DELIVERY
(a) The Equipment shall be delivered at the following location: ________.
(b) The Lessor shall be liable to pay the following penalty for any delay in delivery: ________.
(c) The Lessor shall ensure that the Equipment is delivered in the same condition as last inspected by the Lessee (or, if no inspection is conducted, as on the date of execution of this Agreement).
(d) The Lessee shall take possession of the Equipment at the said location on the agreed date. If the Lessee fails to take possession, the risk of loss shall pass to the Lessee from the delivery date.
§13. INSTALLATION
(a) Before installing the Equipment, the Lessee shall obtain all necessary permits from the concerned authorities.
(b) Installation shall be performed by the Lessee in a professional and workmanlike manner in conformance with all recommendations of the manufacturer, including specifications and requirements of power, ventilation and other resources, and in compliance with good engineering practices.
(c) The installer and operator shall have a thorough understanding of the Equipment, including operating instructions, specifications and safety precautions.
(d) Only correct and appropriate tools shall be used for installation and operation.
(e) The Equipment shall be installed in a safe manner, with proper safety measures in place.
(f) After installation, the Equipment shall be tested and inspected to ensure that it functions properly and in accordance with all relevant regulations and standards.
§14. REPAIRS AND MAINTENANCE
(a) Day-to-day minor repairs shall be carried out by the ________ at its own cost, and any major repairs shall be attended to by the Lessor. If the Lessor fails to carry out major repairs on receiving notice from the Lessee, the Lessee may undertake the necessary repairs, and the Lessor shall reimburse the costs so incurred within ________ (________) business days.
(b) Minor repairs include: ________.
§15. INSPECTION
(a) The Lessor and/or its authorised personnel shall have the right to enter upon the premises of the Lessee and inspect the Equipment, with prior written notice of ________, during the following hours: ________.
(b) Provided that in case of an emergency, no prior notice shall be required.
§16. OBLIGATIONS OF THE LESSEE
(a) The Lessee shall use the Equipment in accordance with this Agreement and all applicable laws and regulations.
(b) The Lessee shall conduct regular inspections of the Equipment to identify any issues or potential problems, including visual inspections and functional tests.
(c) The Lessee shall regularly clean the Equipment as per the manufacturer's manual or instructions of the Lessor.
(d) The Lessee shall pay all charges for gas, water, steam, electricity and other utilities used in connection with the Equipment, including charges for installation of such services.
(e) The Equipment shall be regularly serviced and maintained, including the following: ________.
(f) The Lessee shall use the Equipment and its accessories carefully and responsibly and shall return the Equipment to the Lessor in the same condition (reasonable wear and tear excepted).
(g) The Lessee shall comply with all applicable regulations relating to the use and operation of the Equipment, including environmental, safety and usage standards.
(h) The Lessee shall store and handle the Equipment in a safe and secure manner, avoiding damage or theft.
(i) The Lessee shall be responsible for any damage to the Equipment caused by its personnel, including employees and operators.
(j) The Lessee shall not destroy, deface, damage, impair or remove any part of the Equipment belonging to the Lessor, nor permit any person to do so.
(k) The Lessee shall immediately report any issues or problems with the Equipment to the Lessor.
(l) In the event of loss or damage, the Lessee shall, at its option:
(I) repair the Equipment to its good working condition;
(II) replace the Equipment with like equipment of the same or later model, in good condition and working order, free of all liens and encumbrances, such replacement to be incorporated into this Agreement by appropriate endorsement;
(III) pay the Lessor the replacement value at then-existing market prices; provided that
(IV) the Lessee shall have no responsibility or obligation if such loss or damage is caused by the Lessor, its employees or agents.
§17. TAXES AND OUTGOINGS
(a) The Lessee shall be liable to pay all charges, taxes, levies, cess and outgoings in respect of the use and operation of the Equipment during the Lease Period, including charges for electricity, water, fuel and other utilities consumed in connection with the Equipment.
(b) The Lessor shall be liable to pay all taxes, duties and other statutory levies, if any, payable in respect of the ownership of the Equipment.
(c) If any Party fails to pay any taxes, charges or outgoings for which it is liable, the other Party may, at its option, pay the same and recover the amount from the defaulting Party, who shall reimburse such amount within 15 (fifteen) business days from receipt of a written demand.
§18. REPRESENTATIONS AND WARRANTIES OF THE LESSOR
(a) Title – The Lessor has clear and marketable title to the Equipment and has the right, power and authority to grant the lease.
(b) Taxes and Outgoings – The Lessor has paid and shall pay all existing and future taxes, fees and similar outgoings in respect of ownership of the Equipment.
(c) Quiet Enjoyment – The Lessee shall enjoy quiet possession and use of the Equipment during the Lease Period, free from interference by the Lessor or any person claiming through the Lessor.
(d) Non-Infringement – The use of the Equipment by the Lessee will not infringe any patent, trademark, copyright or other proprietary right of any third party.
(e) Except as specified above, the Lessor makes no representations or warranties, express or implied, with regard to the condition of the Equipment, and the Lessee takes the Equipment on an as-is-where-is basis.
§19. REPRESENTATIONS AND WARRANTIES OF THE LESSEE
The Lessee hereby covenants, warrants and represents to the Lessor as follows:
(I) Use – to use the Equipment in accordance with this Agreement and all applicable laws and regulations;
(II) Non-Infringement – that the use of the Equipment will not infringe any patent, trademark, copyright or other proprietary right of any third party;
(III) Rent – to pay the Rent on the due dates and in the manner specified herein and to observe all terms and conditions of this Agreement;
(IV) Good Condition – to keep the Equipment in good condition and fully functional at all times.
§20. RETURN OF THE EQUIPMENT
(a) The Equipment shall be returned at the following location: ________.
(b) The Lessee shall return the Equipment within ________ (________) business days after the termination or expiry of this Agreement.
(c) The Lessee shall be liable to pay the following penalty for any delay in returning the Equipment: ________.
(d) The Lessor shall take possession of the Equipment at the said location on the agreed date. If the Lessor fails to take possession, the risk of loss shall pass to the Lessor from the return date.
§21. OPTION TO PURCHASE
At the end of the Lease Period, the Lessee shall have the option to purchase the Equipment for a consideration of Rs. ________ (Rupees ________), subject to payment of all applicable taxes, stamp duty and execution of appropriate transfer documents.
§22. INSURANCE
(a) The ________ shall be responsible for insuring the Equipment.
(b) The insurance coverage shall be ________, with a minimum insured declared value (IDV) of Rs. ________ (Rupees ________).
(c) Upon request, a copy of the insurance certificate shall be provided to the other Party within 3 (three) business days.
(d) Should the responsible Party choose not to insure the Equipment, it shall be solely responsible for any damage and/or liability arising therefrom.
§23. RIGHT TO MORTGAGE
The Lessor reserves the right to mortgage or otherwise place a lien on the Equipment, and the Lessee agrees to accept the Equipment subject and subordinate to any such mortgage or lien. If the Equipment is already mortgaged, the Lessor shall obtain the consent of the mortgagee, if required, for the lease of the Equipment.
§24. SPECIAL CONDITIONS
The Lessee shall not, without the prior written permission of the Lessor, carry out the following with the Equipment: ________.
§25. EVENTS OF DEFAULT
A breach of any term of this Agreement by the Lessee which is not cured within ________ from receipt of notice from the Lessor shall constitute a default under this Agreement. Such breaches may include, but are not limited to, failure to pay Rent, engaging in any unlawful activity, damaging or destroying the Equipment or its accessories, or violating any provision of this Agreement.
§26. TERMINATION
(a) The Lessor shall be entitled to terminate the lease in the event of a default by the Lessee which is not cured within ________ from the date of receipt of a written notice from the Lessor.
(b) The Lessor may terminate this Agreement by giving written notice of ________ to the Lessee of its intention to terminate.
(c) The Lessee may terminate this Agreement by giving written notice of ________ to the Lessor of its intention to terminate.
(d) Upon any termination of the lease for any reason, the Lessee shall return the Equipment to the Lessor simultaneously with the Lessor refunding the Security Deposit after adjusting all monies due and payable by the Lessee under this Agreement.
§27. INDEMNITY
(a) Each Party shall defend, indemnify and hold harmless the other Party from and against any claim, liability, demand, loss, damage, judgment or other obligation arising as a result of breach by such Party of this Agreement or any misrepresentation made herein.
(b) The Lessee shall indemnify and hold the Lessor harmless from all loss and damage to the Equipment during the Lease Period.
(c) The Lessee shall indemnify and hold the Lessor harmless from all fines, forfeitures, seizures, confiscations and penalties arising out of any violation.
(d) The Lessee shall indemnify and hold the Lessor harmless against all liability for injury, disability or death of workmen and other persons caused by the operation, use, control, handling or transportation of the Equipment during the Lease Period.
(e) The Lessee bears all risk of loss or damage to property or injury to person incidental to the operation of the Equipment during the Lease Period.
§28. ASSIGNMENT BY LESSOR
The Lessor shall be entitled to sell, assign, convey or transfer in any manner its interest in the Equipment or its rights and obligations under this Agreement to any third party without the written consent of the Lessee, provided that the Lessor ensures that the prospective purchaser/assignee agrees to be bound by the terms of this Agreement.
§29. FORCE MAJEURE
Neither Party shall be liable for any failure or delay in the performance of its obligations under this Agreement (other than the payment of monies already accrued and due) to the extent such failure or delay is caused by an event beyond its reasonable control, including acts of God, flood, fire, earthquake, epidemic, pandemic, war, riot, governmental order or restriction. The affected Party shall promptly notify the other Party and use reasonable efforts to mitigate the effects of such event.
§30. AMENDMENT
No alteration, addition or omission shall be made to this Agreement except by a supplementary agreement in writing duly executed by both Parties.
§31. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws of India.
§32. DISPUTE RESOLUTION
(a) Except as otherwise specifically provided herein, the following provisions shall apply to any dispute, difference or claim arising out of, relating to or in connection with this Agreement (a "Dispute").
(b) A Dispute shall be deemed to arise when one Party serves on the other a written notice stating the nature of the Dispute (a "Notice of Dispute").
(c) Upon service of a Notice of Dispute, the Parties shall use all reasonable efforts to resolve the Dispute amicably through negotiation within 30 (thirty) days.
(d) A Dispute which cannot be resolved by negotiation shall be referred to and finally resolved by arbitration by a sole arbitrator to be appointed jointly by the Parties, in accordance with the provisions of the Arbitration and Conciliation Act, 1996 (and any statutory modification or re-enactment thereof for the time being in force).
(e) The seat and venue of arbitration shall be ________, and the language of arbitration shall be English.
(f) The arbitral award shall be final and binding on the Parties and may be enforced as a decree of the court.
(g) Subject to the above, the courts at ________ shall have exclusive jurisdiction over all matters arising under this Agreement.
§33. NOTICES
(a) Any notice or other communication required or authorised under this Agreement shall be given in writing, in the English language, and shall be served by:
(I) sending it to the email address of the relevant Party; or
(II) delivering it by hand (a written acknowledgement of receipt being sufficient evidence of due service); or
(III) sending it by a nationally recognised courier or registered post with acknowledgement due,
to the relevant Party at the address specified in the recitals of this Agreement, or such other address as may be notified in writing.
§34. SEVERABILITY
If any provision of this Agreement is or becomes illegal, invalid or unenforceable under any law, the legality, validity and enforceability of the remaining provisions shall not be affected or impaired thereby.
§35. WAIVER
No failure or delay by either Party in exercising any right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or future exercise thereof. The remedies herein are cumulative and not exclusive of any remedies provided by law.
§36. ENTIRE AGREEMENT
This Agreement, together with its schedules and annexures, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior negotiations, understandings and agreements, whether oral or written.
§37. COUNTERPARTS
This Agreement may be executed in ________ counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Parties hereto have set their respective hands to this Agreement on the day, month and year first hereinabove written.
___________________________
LESSOR: ________
___________________________
LESSEE: ________
WITNESSES:
1. Name: ________, Address: ________, Signature: ___________________________
2. Name: ________, Address: ________, Signature: ___________________________
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