5 commonly missed clauses in hire/rental agreements

5 commonly missed clauses in hire/rental agreements

I have reviewed a number of rental agreements and sometimes I shudder at the lack of protection, given the value of the equipment that is being rented.  Other times a new client will come after they had “Googled” a contract only to find that it did not protect them against the client who spilled Vodka all over the expensive AV equipment.

If you’re in the business of hiring out equipment and goods, it is essential that you have a clear, well-drafted rental/hire agreement.  There is a lot of risk involved with renting out expensive equipment, so here are some common hire agreement oversights that should be addressed:

1. Damage/loss of the equipment

What if the equipment breaks?  Who is responsible?  It can be tricky business as not only do business owners need to comply with consumer law which requires that goods be of acceptable quality and fit for the intended purpose.  Make sure you have a clause that clarifies your rights and obligations in regards to damage to the equipment.

2. Use of the equipment

Make sure you are aware of how the equipment will be used to determine whether it will be fit for use for that purpose.   This requirement can be important in order to take back the equipment if the hirer breaches the contract.

3. Insurance

Is the hirer required to obtain insurance?  If the equipment is destroyed by natural disaster such as fire, or stolen – who will bear the cost and does their insurance cover their hire of your equipment?  This is something few businesses consider until it is too late – so make sure you have it clearly outlined in your agreement.

4. Delivery

Who is in-charge of delivery or pick-up of the equipment?  It can be costly moving heavy machinery from one location to another, make sure it is clear who bears this cost.

5. Defects and Imperfections

Under Australian Consumer law, equipment with defects may still be of “acceptable quality” if the hirer is alerted to the defect before agreeing to the rental or the hirer examines the equipment prior to the rental and determines that it is of acceptable quality (at least, physically – though this does not cover hidden or difficult to detect defects).  It is best to clearly disclose any defects in a Schedule in your agreement to substantiate any claims that suggest the equipment is not of acceptable quality and fit for use.

If you need advice or assistance with your hire/rental agreement, contact me at  or call me at 1300 033 934 for a no-obligation quote.