If you`re planning to rent out equipment or assets for temporary use, a dry hire agreement can be a crucial document to protect yourself and your business. In New Zealand, there are several legal requirements and best practices for drafting a dry hire agreement template that both parties can agree on. In this article, we`ll discuss what a dry hire agreement is, why you need one, and the key components of a standard template.
What is a Dry Hire Agreement?
A dry hire agreement is a legally binding contract between a lessee (renter) and a lessor (owner) that outlines the terms and conditions of renting out equipment or assets. Unlike a wet hire agreement, where the owner also provides labor and/or operation of the equipment, a dry hire agreement only covers the rental of the equipment (sometimes with maintenance/repair provisions) and places the responsibility on the lessee to operate it. Dry hire agreements are commonly used in the construction, events, and film industries in New Zealand.
Why do you need a Dry Hire Agreement?
Having a dry hire agreement can provide protection for both parties in the event of equipment damage, loss or theft, and/or personal injury or property damage. A clear agreement can also ensure that both parties understand their responsibilities and obligations, such as payment terms, insurance requirements, and equipment maintenance provisions.
Key Components of a Dry Hire Agreement Template NZ
Here are some essential components that should be included in a standard dry hire agreement template in New Zealand:
1. Parties Involved: Include the names, business addresses, and contact information of both the lessor and lessee.
2. Equipment: Clearly describe the type(s) of equipment or assets being rented out, their condition, and any limitations or restrictions on use. Consider attaching photos or documents to support the description.
3. Term of Agreement: Specify the start and end dates of the rental period, and any provisions for early termination or extension.
4. Payment Terms: Describe the rental fee and payment schedule, including any late fees or penalties for non-payment.
5. Insurance: Define the insurance requirements for both parties, including liability, property damage, and workers` compensation coverage.
6. Maintenance/Repairs: Outline the lessor`s and lessee`s responsibilities for maintaining the equipment during the rental period, including repair provisions and who will pay for repairs.
7. Indemnification: Include a clause that states that each party will indemnify and hold the other party harmless from any claims, losses, or damages arising from the rental agreement.
8. Governing Law: Specify the governing law that will apply to the dry hire agreement, and any provisions for dispute resolution.
Conclusion
A dry hire agreement can be a valuable tool for protecting your business and assets when renting out equipment or assets in New Zealand. By including the essential components outlined above in a standard template, you can ensure that both parties understand their obligations and responsibilities, and reduce the likelihood of disputes or legal issues. If you`re unsure about drafting a dry hire agreement, it`s advisable to consult with a legal professional or use a pre-existing template as a guide.