Description

Personal Property Lease (Pro-Lessor, Short Form)

Summary

This personal property lease is a short-form agreement. It is drafted in lessor’s favor, for leasing personal property, such as office furniture or equipment.

Lease agreements vary in length and complexity depending on a variety of factors, such as:

• The relationship between the parties.
• The size of the deal.
• The characteristics of the property being leased.
• The creditworthiness and reliability of the parties.
• The allocation of warranty and other responsibilities.

Details

This Personal Property Lease is:

• A short-form personal property lease agreement that contemplates a lease of personal property under the Uniform Commercial Code (UCC). This lease covers personal property such as office equipment or furniture.
• Drafted from the perspective of the lessor in the business of renting out personal property.

Assumptions

This Personal Property Lease assumes that:

This agreement governs a single lease transaction of simple non-custom made equipment or goods.

This Lease is not a master lease agreement. If the lessee desires to lease additional items from the lessor, a separate contract will govern each additional lease.

The transaction is based on the model UCC.

Agreements for the lease of goods are typically governed by UCC Article 2A, as enacted by the relevant state whose law applies to the transaction. Parties should consult the version of the UCC enacted in the state whose law applies to the transaction, which may be different than the model code.

The transaction does not include the provision of services.

If the lessee desires regular maintenance or servicing, then the parties must revise the agreement accordingly or enter into a service agreement.

The leased property does not include intellectual property such as software.

If the equipment includes software, the parties must revise the agreement to address licensing and sublicensing issues by including a software license clause.

This is a true lease under the UCC.

A lessor who wants to protect its ownership rights in the equipment against the rights of third-party creditors of the lessee typically structures the lease as a UCC true lease, rather than the sale of the property secured by a security interest in the property. This short-form of lease follows the customary practice of not including explicit language confirming the UCC true lease status of the lease. However, even if the parties include explicit confirmation language, the lease is not a UCC true lease unless it has the requisite characteristics of a UCC true lease. For example, this agreement does not give the lessee an end-of-lease option to purchase the equipment at less than fair market value such an option strips the lessor of the significant “residual economic interest” in the equipment. However, the lessor must retain the significant”residual economic interest” to preserve UCC true lease status.

This is a domestic lease.

Parties may need to modify these terms to comply with local laws.  Thus, parties should consider modifying these terms if organized or operating in a foreign jurisdiction.  Additionally, parties should consider modifying these terms if their transactions take place in a foreign jurisdiction.

Parties are using these terms in a business-to business transaction.

Parties should not use this Lease in a consumer contract. Due to the fact that consumer contracts may involve legal and regulatory requirements and practical considerations that are beyond the scope of this resource parties should not use this agreement in a consumer contract.

These terms are not industry-specific.

This Personal Property Lease does not account for any industry-specific laws, rules, or regulations that may apply to certain transactions, products, or services.