Legal issues in equipment lease contracts

Legal issues in equipment lease contracts First, on the leasing equipment 1, the parties must seriously fill in equipment. The equipment situation is mainly the subject matter of the lease and its scope. If the subject matter of the lease and its scope are unclear, such disputes may arise. For example, when the subject matter is transferred, an accident occurs, or a quality dispute arises, it will involve: Is it not the owner’s equipment? It is understood that The current tower cranes do not have the similar practice of car stamping on engines and chassis. This will easily create disputes. In addition, tower cranes or other equipment are separable. So, how many standard sections are there? What other accessories are there? These must be clearly defined. The number of subsidiary parts and brand quality also directly affect the rental costs. A clear list of equipment conditions can avoid many disputes during the equipment rental process and return, even if disputes are easily resolved.

2. In the lease contract, the lessor shall provide the lessee with the business license of the lessor, the qualifications for the lease, the qualifications for the operation of the crew, and various valid certificates and disassembly and assembly qualifications issued by the Construction Commission and Special Equipment Testing Center. A copy of the certificate. There are several implications for making such a rule: One is to facilitate the administration of the administrative department; for the lessee, it is guaranteed that they obtain equipment and services that meet the requirements. These contents are clearly stipulated in the contract. The reason is that the "Contract Law" now stipulates that only if the mandatory provisions of laws and administrative regulations are violated will the contract be invalidated. In this way, sector regulations have been weakened to a great extent, not to mention the impact of government regulations issued by the municipal government or the Construction Commission on the contract. Therefore, the parties should specify their own requirements in the contract.

3. I hereby emphasize in particular that in the contract, the lessor shall ensure that the leased equipment provided is qualified for inspection by the Special Equipment Testing Center and the Municipal Construction Committee, and the technical performance is good. Construction equipment, especially those in the equipment, are well aware of the role of equipment inspection. The author participated in the handling of an accident dispute in 1995. Finally, after our analysis, it was because the parties did not carry out inspections in accordance with the requirements before the tower cranes were put into use. They did not carry out load tests and did not adjust the safety devices. As a result, the equipment could not be pre-alarmed and shut down when overloaded. As a result, the tower cranes fell. Fortunately, no casualties occurred and no more damage was caused.

Second, on the delivery of equipment 1. Clearly agreed delivery time and place, strict performance of delivery procedures for the parties have a very important significance. Whether the parties fulfilled the contract in the end? Did they perform the contract in a timely manner? When was the equipment risk transferred? When does the rent start, it must always be linked to the equipment delivery? But for such an important part, I found that in many cases of controversy, the parties did not pay attention to it. This should not be the case. Therefore, the parties must clearly stipulate the time and place of delivery of the equipment and specify the delivery procedures. The lease contract should stipulate: When the equipment is delivered, Party A and Party B shall send representatives to inventory equipment and accessories, and make a handover list, signed by the representatives of Party A and Party B. The parties must fulfill the handover procedures, otherwise they will face an unfavorable situation when they testify in court. You said when and where did you deliver the equipment, how did you prove it? There was a hand-over procedure to solve the problem easily. The signing time of the representatives of both parties is the actual delivery time. This delivery time is very useful in determining the rights of both parties.

2. In addition, there may be some changes in the circumstances after the signing of the contract. It is possible to change the time and place of delivery. However, it is possible to make a clear agreement in the contract so as to avoid unnecessary losses. In this regard, the lease contract should stipulate that the lessee shall notify the lessor in written form such as 14 days in advance of the change of the agreed delivery time and delivery location. The leasing party cannot deliver the leased equipment but must also notify the lessee in writing within 14 days in advance. Compensation for losses caused by failure to notify the other party in a timely manner should be compensated.

Third, on the installation and acceptance of equipment, tower cranes and a lot of engineering equipment and cars are not the same. When the car is bought back, it can be opened with oil, and the crane must transport the parts to the site and be used after the installation is completed. This creates a series of legal issues. The installation site must have the corresponding supporting conditions to install. Then, first of all, what kind of technical conditions and supporting conditions are required on the site? These conditions should be provided by the lessor. Therefore, the lease contract should stipulate that: the lessor shall provide the tenants with accurate basic production drawings and technical requirements for a certain period of time, such as 14 days before the agreed delivery time, and assign professional personnel to assist the lessee in the pre-embedding of the embedded parts. . The installation site is controlled by the lessee. Therefore, the lease contract should require the lessee to determine the construction plan and be responsible for the basic production. After the acceptance of the foundation, copies of relevant technical data, such as hidden inspection records, concrete test reports, ground resistance measurement records, etc., shall be stamped or signed by the lessee and then delivered to the lessor for signing. The lessee shall also issue an on-site plan to the lessor to provide the location of the axis, elevation dimensions and detailed geological data, indicating the location of the equipment. If the accident is caused by the foundation sinking or insufficient concrete strength, all losses shall be the responsibility of the lessee. Of course, if the loss caused by the technical conditions raised by the lessor is wrong, it shall be borne by the lessor. The lessee shall also prepare other supporting conditions. The lessee shall be responsible for preparing the special distribution box, responsible for connecting the power supply, providing sufficient assembly sites, ensuring that the equipment is in and out of the road and the operation is convenient. Losses caused by installation, disassembly and equipment operating conditions on site shall be borne by the lessee. The lessor knows more about its own equipment. Therefore, it is more reasonable for the equipment to be installed by the lessor, but the expenses incurred shall be borne by the lessee. However, whether the installation cost is included in other parts of the contract, or whether the individual charges should be clearly stated. Equipment installation should be carried out by the unit that holds the dismantling qualification. The lessor can entrust a third party to install. The installation equipment must be additionally signed with the installation contract. After the installation is completed, the lessee is responsible for the preparation of the inspection and acceptance, the organization of the inspection and acceptance of valid acceptance procedures and acceptance data. This is because the equipment acceptance is at the lessee’s site and it is more convenient for the lessee to organize the inspection. However, the lessor should cooperate with the lessee for acceptance because the lessor understands better the acceptance procedure. However, the legally most important thing is that the acceptance should be completed after the acceptance of both parties to participate in the inspection and sign on the acceptance report, both sides hold one. The most recognized in court is such written evidence. You have done a lot of work, but it can't be reflected in written documents. It's still very difficult to explain that you did the work.

Fourth, on the contract price and payment methods On the contract price, the parties must be agreed to clearly include what costs, if there are other separate charges must be listed separately, otherwise, you can not ask the lessor to pay an additional fee. The lease contract is best to split the total cost into two parts. One is that the lessee should pay the lessor’s equipment entry fee, demolition, installation, and transportation fees. The lessee shall pay the fee for a certain period of time, such as 7 days, before the equipment is delivered.

In addition, the contract determines the monthly equipment rental fee. After the installation of the equipment is completed, the lease fee will start to be calculated. The deadline for the calculation of the lease fee is the time when the lessor receives written notice from the lessee requesting the return of the equipment. Less than one month's rental fee is converted according to 30 days per month. The rental fee is paid monthly and the monthly rental fee is paid for a certain period of time, such as 10 days a month. The starting time of the rent and the payment time must be clearly understood.

The lease contract should finally stipulate that the price of this contract is determined through full negotiation between Party A and B based on the bidding documents and the bid price of the lessor. The price of this contract has fully taken into account the various complex factors and all necessary expenses that may be encountered during construction. Unless otherwise stipulated in this contract or changed through mutual agreement, during the performance of the contract, unless otherwise under any circumstances whatsoever, neither party may alter the contract price. This means that the lessor should clearly list the fees to be collected here, and no additional fees can be requested.

V. Repair, Maintenance and Operation of Rental Equipment 1. Tower Crane This kind of engineering equipment is a relatively large-scale equipment and is installed on site. The maintenance problem must be involved in the operation process. In this way, it involves at least two aspects of the problem, one is the maintenance responsibility, the lease contract should stipulate that the lessor is responsible for the repair and maintenance services of rental equipment. All maintenance and repair expenses during the lease are borne by the lessor. This provision also complies with the provisions of the Contract Law. The maintenance must be timely, otherwise it will affect the construction of the project and the loss will be great. The lease contract should stipulate that: equipment failure, the lessor maintenance personnel should be within a certain time, such as 2 hours after receiving the notice to the scene, to minimize the construction loss. On the other hand, since maintenance is unavoidable, downtime due to maintenance is also normal. In this case, the lessee cannot ask the lessor to bear the loss. The lease contract should stipulate that the failure of the rental tower crane maintenance and the downtime is less than a certain period of time, such as 48 hours, is normal maintenance, and the lessee does not deduct the rental expenses. The maintenance or maintenance shutdown exceeds a certain period of time, such as 48 hours per month, and the excess part deducts the lease fee according to the number of actual days of downtime. The lessee shall not require the lessor to bear other losses caused by the shutdown. If the downtime is particularly long (greater than 14 days), the lessee may consider rescinding the contract and rent the tower crane. This is easy to do under current market conditions. I have also been in contact with such cases because the maintenance of tower cranes caused work stoppages and the buyer asked the seller to take responsibility for the compensation. Since there is no explicit contractual agreement, the court will be sentenced to bear the loss of work stoppage. Of course, the court will make some compromises and other factors should be considered. This shows that the time for normal maintenance is clearly stipulated in the contract. It is very necessary to bear no downtime during this period.

2. The leasing contract shall provide that the lessor is responsible for equipping the leased equipment with crew members, including captain one. This rule is more in line with the general conditions of renting. If the lessee is equipped with its own crew, it should be clearly stated in the contract. The crew members shall accept the direction of the lessee and cooperate with the construction to ensure that there are people 24 hours during the lease period. For crew members who do not abide by the site management system and cause damage to the lessee's construction personnel for no reason, the lessee has the right to ask the lessor for replacement. After receiving the notice from the lessee, the lessor should replace it within a certain period of time, such as within 48 hours. The crew member of the lessor must hold a certificate. The lessor shall deliver a copy of the crew's qualification certificate to the lessee. In the event that the lessor provides the driver, it is forbidden for the lessee to operate and repair the tower crane without authorization. All consequences caused by the lessee's unauthorized operation and repair of the tower crane shall be borne entirely by the lessee. The lessee shall be responsible for all accidents that occur as a result of the lessee’s own operation.

3. Other supporting personnel are also required during the operation of the tower crane. Therefore, the lease contract should provide that the lessee should be equipped with enough full-time commanders, signal workers, and hooked personnel, and must hold a certificate. Signal workers must not command illegally. If the accident is caused by illegal command or improper connection, all consequences shall be the responsibility of the lessee.

4. With the construction of the project, buildings are constantly increasing. The lease contract should specify that when the tower crane needs to be lifted or anchored (external elevators need to be connected), the lessee should notify the lessor for a certain period of time, such as 7 days. The lessee shall carefully prepare the preparations for the preparation of holes and operating platforms based on the data and requirements provided by the lessor.

5. The lessor shall ensure the implementation of the machinery maintenance and maintenance system so that the equipment is in good operating condition. The unit shall perform daily inspections and monthly inspections of the equipment in accordance with the "Safety Regulations for Hoisting Machinery" and GB5144-94 "Safety Regulations for Tower Cranes", earnestly implement the handover system, and make an archive of inspection records. The lessee has the right to inspect the equipment's operating records and daily inspection and monthly inspection records.

Sixth, regarding the change of the lease contract 1. During the lease period, if the lessee transfers ownership of the leased tower crane to a third party, it shall formally notify the lessor, and the new owner of the leased tower crane will become the actual lessor of this contract and continue to perform. The rights and obligations as agreed between Party A and Party B. There is an important theory in law, called "buying and selling can not break the lease." That is to say, the lessor transfers the ownership of the leased property to another person, and the lessee’s tenancy right and use right should not be affected and can continue to rent. The new owner cannot take away the leased property for use or lease to others.

2. The lessee shall not transfer the leased equipment without the consent of the lessor; otherwise, the loss caused by the lessee's unauthorized transfer of the equipment shall be borne by the lessee.

VII. Custody of Equipment and Risk Responsibility Regarding Equipment Custody and Risks Many contracts do not have clear regulations. In fact, this part is also very important. Since the leased equipment is on the construction site of the lessee, it is reasonable to require the lessee to keep the equipment. The lease contract shall stipulate that: from the actual delivery of the leased equipment to the lessee, and until the equipment is returned to the lessor, the responsibility for the storage of equipment during this period shall be borne by the lessee. Loss of equipment due to improper storage and loss of accessories shall be the responsibility of the lessee. Closely related to custody is the risk responsibility of the equipment. At present, China's engineering construction field, including equipment leasing, generally has no concept of risk, and is rarely insured, nor is it stipulated in the contract. But the risk is real. What I want to say here is that the risk exists for both the lessor and the lessee. In a leasing contract, it is advisable to divide the risk into two parts: On the one hand, all the insurance for the leased equipment and crew is undertaken by the lessor. Correspondingly, the liability of equipment losses and casualties caused by force majeure is also borne by the lessor. On the other hand, all public and third-party insurance is undertaken by the lessee. Correspondingly, the liability of the tenant shall also be borne by the liability for damages to other properties and casualties caused by force majeure.

After an accident occurs in the leased equipment, the lessor is responsible for the aftermath of the leased equipment and crew and the first payment. The lessee is responsible for other aftercare and preemptive payments.

8. Discharge of contracts and liability for breach of contract Lease contracts should be released in a relatively liberal manner. This is in consideration of the fact that the leased equipment is linked to the construction and cannot set too harsh conditions for the cancellation of the contract, otherwise it may cause unnecessary losses. Before the delivery date, the contract is best agreed: Party A and Party B shall notify the other party of a certain period of time, such as 28 days, prior to the contracted delivery date, that the contract can be rescinded. The party that requested the cancellation of the contract can cancel the contract as long as it compensates the other party for a contract loss of 10,000 yuan. During the performance of the contract, the lessor did not deliver the leased equipment according to the agreed time, or the leased equipment delivered could not be accepted within a certain period of time, such as 14 days, or the equipment could not be repaired and put into use for a certain period of time, such as 14 days, the lessee. Have the right to request the cancellation of the contract and require the lessor to refund the expenses already paid for in the contract, and the lessor shall pay the lessee the same amount of the breached penalty. This is how the lender breaches the contract.

For breach of contract by the lessee, the lease contract should stipulate that: if the lessee pays the rent overdue, it shall pay the liquidated damages according to a certain percentage, such as three-tenths of a day, per day. If the lessee fails to pay the lease fee over a certain period of time, such as 28 days, the lessor has the right to stop the operation of the equipment. If the lessee's overdue payment of rent exceeds a certain period of time, such as 56 days, the lessor has the right to rescind the contract, recover the equipment by himself, and require the lessee to pay the breached contract money in the contract.

Nine, the equipment is returned to the lessee to use the equipment is completed, the request for return of the equipment should be written notice to the lessor. This notice indicates the deadline for the tenant to calculate the term of the rent. If the lessee does not make such notification, indicating that the lessee continues to use the rental equipment, the rent will continue to be calculated. Therefore, the lease contract should stipulate: The time when the lessor receives the notice or the time the tenant delivers the post office is the calculation of the lease fee. The lessor will arrive at the equipment site within a certain period of time, such as within 24 hours after receiving the notice of returning the equipment, and the lessee will return the equipment for the formalities. After the two parties have signed up the equipment, they will sign on the transfer list and each will have one.

X. Dispute Resolution Method During the execution of the contract, due to the other party's breach of contract causing loss or failure of normal performance, the observing party shall promptly submit written materials to the other party to explain the relevant circumstances and claim requirements. The party receiving such information shall give written reply within a certain period of time, such as 7 days. If the deadline is exceeded, the non-response shall be regarded as the request of the party that agreed to submit the written information. If the observing party knows or should know that the other party has breached the contract and does not submit any written information to the other party after a certain period of time, such as 28 days, it shall be deemed to have waived the claim against the breaching party. In addition, the settlement of disputes in the lease contract is preferably agreed upon by the arbitration or court trial in the location of the equipment construction site. 11. Party A and Party B representatives and contact parties The lease contract should specify the formal representative and address of both parties to perform the contract. If the performance representative is changed during the performance process, it shall notify the other party in writing. The loss or other legal liability resulting from failure to notify the other party shall be borne by the party not notified. Document transmission during the compliance process should be in writing. It can be submitted to the other party's performance representative for signing, or by postal mail or express mail. These may seem trivial but they are all key issues that often affect the verdict in practice.

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