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Equipment Hire Agreement

An Equipment Hire Agreement sets out the obligations, terms and conditions regarding the rental of equipment.

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4.8 (84 reviews)

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Last updated December 20, 2024

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Under 10 minutes

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Suitable for Australia

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Written by

Edwin Montoya Zorrilla

Reviewed by

Damin Murdock

Document Overview

If your business hires out equipment to customers, you should have an Equipment Hire Agreement (Agreement). This Agreement clearly and accurately sets out the obligations, terms and conditions regarding the rental of equipment. Put simply, it contains everything a customer (hirer) needs to know about the equipment they rent.  

Is it a legal requirement to have an Equipment Hire Agreement?  

An equipment hire agreement is not legally required, however it is certainly encouraged from a legal perspective. This Agreement creates a formal contract between your business and the hirer. It enforces some key protections and limitations. Signed by both parties, the document comprehensively outlines the respective roles and responsibilities. Customers should read and sign the Agreement prior to or at the commencement of the rental of equipment. The Agreement can be conveniently attached to an invoice for example. Update your Agreement accordingly to accurately reflect your business’ current rental procedure.  

Why should I have an Equipment Hire Agreement?

The Agreement has important implications for your business and customers. It is in your business’ best interests to have a detailed and easy-to-understand Agreement. The Agreement provides a strong contractual framework for a drama-free rental experience. Hiring out equipment carries invariable risks. This Agreement anticipates and helps manage risks, limits your business’ liability, protects against unwanted costs, and proactively sets out the procedure if things go awry. It also ensures both parties are aware of the consequences of non-compliance with the Agreement. Overall, this helps clarify and manage customer expectations, and thus reduces the risk of dispute and misinformation. The Agreement makes customers better informed, and also encourages consistency on your business’ end with respect to obligations and procedure. 

The Legal Risk Score of a Equipment Hire Agreement Template

Our legal team have marked this document as low risk considering:

  • The document places the responsibility for any damage, loss, or necessary repairs of the equipment on the user during the rental period, which could lead to significant unexpected costs if any issues arise.
  • Users are required to comply with all applicable laws, manufacturer's recommendations, and health and safety regulations when using the equipment, which adds a layer of diligence and potential liability.
  • The agreement stipulates that the user must return the equipment thoroughly cleaned and in the same condition as when hired, failing which they will incur additional costs.
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Equipment Hire Agreement Checklist

Complete your free Equipment Hire Agreement with our checklist

Verify Equipment and Schedule Details

Ensure that all details about the equipment, hire fee, and hire period are accurately listed in the Schedule to avoid discrepancies during the rental period.

Sign and Obtain Copies

Both parties should sign the agreement and each retain a copy to ensure that both have legal proof of the terms and conditions agreed upon.

Review Compliance Requirements

Review all operational, safety, and legal requirements mentioned in the agreement to ensure full compliance throughout the hire period.

Plan for Return and Inspection

Schedule the return of the equipment and plan for its inspection to ensure it meets the conditions for return as stipulated in the agreement, including cleanliness and maintenance state.

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What does this Agreement cover?

This Agreement comprises the terms and conditions of rental, including but not limited to: 

  • Hire: Commencement of the hire period, possibility of extension, return of goods, refund policy
  • Payment
  • Use, operation and maintenance
  • Warranties
  • Taxes
  • Indemnity
  • Loss, damage or breakdown
  • Insurance
  • Liability
  • Repossession
  • Completion of hire period
  • Default
  • Remedies

Further Information:


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