Avoiding Problems with Equipment Rental Contracts
Once managers have worked through the equipment-specific considerations related to equipment rental, they can focus their attention on ensuring the rental agreement is clear, comprehensive, and effective.
Problems might arise because of the lack of a clear agreement defining the way the rental agreement will end. This call-off procedure often creates complications.
For example, does the contract end with a simple phone call from the renter to the renting agent? This question has led to misunderstandings if the agent has no record of the phone call and, as a result, keeps billing the renter. The renter's phone logs might not be sufficient proof the manager made the call-off.
A better arrangement is for the parties to agree in writing about the duties for which each party is responsible. For example, to end the rental, the renter must make a phone call followed by a fax or some other form of written confirmation, and the agent must acknowledge receipt immediately. Some rental companies use a separate call-off agreement.
One caveat: If the main rental contract terms are separate and contain language such as, "This contract represents the entire agreement ...," a separate call-off document might not be valid or enforceable.
If the operator is an employee of the agent or self-employed, an important issue is proof of workers compensation and liability insurance. The rental agent should obtain this proof, in the form of an insurance certificate, from the insurer and submit it to the renter before the job starts.
Both parties also need a clear agreement that defines response time in the event of a mechanical problem with the equipment, especially if the project involves a specific completion deadline with penalties for delays. Delays can be especially costly if the lack of equipment idles the entire project. To avoid these costly delays, some rental agents offer two-hour, four-hour, or same-day delivery of a replacement and removal of the inoperable equipment.
Thomas A. Westerkamp is a maintenance and engineering management consultant and president of the work management division of Westerkamp Group LLC.