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Equipment Rental Success: Read the Contract

By James Piper, P.E. - December 2013 - Equipment Rental & Tools


Maintenance and engineering managers have long recognized that under the right conditions, renting rather than buying equipment can be an effective strategy for controlling maintenance costs. It simply makes sense to rent equipment if technicians use it only occasionally, particularly if the equipment is expensive to buy and maintain.

But managers should not enter the process of renting equipment lightly. While most rental activities end with satisfied parties on both sides, others end with penalties imposed, penalties that can exceed the original cost of equipment rental, whether the equipment in question is an aerial work platform, a portable generator, or temporary heating or cooling equipment. Still other rental activities can lead to legal fees and extended litigation.

While many things can cause a rental experience to go bad, managers can take one step that greatly improves the chances of having a good rental experience: Read the contract. Managers too often fail to read a rental contract before signing it. Equally important is understanding the contract's contents.

Rental contracts typically spell out the specifics of the rental, as well as expectations for those renting the equipment. Failing to read and understand who is responsible for what and when can lead to expensive surprises, some of which might become obvious as soon as technicians begin to use the equipment. Others might not become apparent until technicians return the equipment.

If a contract is unclear, managers need to have it explained or reviewed by someone in the organization who understands the wording of legal documents. While managers must review and understand all components of a contract, several common areas lead to many rental contract disputes.

Equipment Specifics

While it might seem obvious what managers are renting, the rental contract must clearly specify exactly what is included. Consider the case of renting a standby generator. The contract must specify the basics of the generator, such as capacity, operating voltage, duty cycle, and fuel type. But what good is the generator to the user if it features a fuel tank that is too small for the application? Does the rental include cables to connect the generator to the load it is powering? Will the generator arrive on a trailer?

The contract must define the specific piece of equipment and accessories to be supplied. If these specifications are not in the contract, managers will have to pay extra to the rental company or make other arrangements. Knowing ahead of time what will arrive allows managers to make the necessary arrangements and, as a result, avoid delays or surprises.





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