Facility Maintenance Decisions

Terms of Payment Common Issue in Rental Contracts

The term of payments is another common issue in rental contracts. While managers think in terms of contract costs, they also must take into consideration when payments must be made. In some cases, customers must make payments up front, with an adjustment made at the end of the contract for early or late termination. In other cases, customers must pay daily, weekly, or monthly.

If customers must make payments on a regular basis, managers then must make certain that they have the mechanism in place ahead of time to meet the payment schedule requirements in order to avoid late payment fees. This step is particularly important for operations in which invoices are paid only on certain dates.


One common mistake many managers make in renting equipment is to assume the rental company is responsible for all maintenance of the rented equipment. But depending on the equipment in question, customers might be responsible for performing certain routine maintenance tasks on a schedule specified by the rental company. Also, the rental company might or might not provide parts, and failure to perform the required maintenance tasks might result in additional charges.

In most cases, the rental company is responsible for breakdown maintenance, unless the problem arises from improper maintenance and operating practices by the renter. But managers must be sure the rental contract spells out what is considered routine maintenance and who is responsible for performing and paying for it.

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  posted on 12/13/2013   Article Use Policy

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