Top Mistakes With Equipment Leasing

Top Mistakes With Equipment Leasing

Top Mistakes with Equipment Leasing
When negotiating on equipment leasing contracts, small business and​ corporate accounts should review all the​ legal terms in​ order to​ avoid the​ top mistakes associated with leasing equipment .​
These rules are applicable in​ multiple areas of​ equipment leasing from educational, computer and​ engineering equipment leases .​

Mistakes to​ Be Avoided in​ Contracts
One of​ the​ primary mistakes made when negotiating their lease is​ the​ use of​ a​ very short contract .​
The short contract text may not address issues involving problems with software in​ computer leases or​ litigation issues such as​ employee piracy .​
Other issues that are not addressed in​ many short contracts include:
• Software transaction agreements
• Troubleshooting Support Issues
• Clauses handling provider’s going out of​ business
It’s important to​ make sure that all parties have their expectations clearly outlined in​ the​ contract .​
The contract helps avoid mistakes in​ leasing equipment by detailing the​ obligations of​ both parties .​
Contracts that possess clarity and​ completeness are important and​ the​ shorter the​ contract, the​ more likely there will be legal risks and​ ramifications for​ the​ company leasing the​ equipment.
Performance Details
The contract should detail the​ performance of​ the​ equipment .​
If someone is​ leasing a​ computer system, a​ server or​ a​ backhoe, they need to​ know that it​ will handle the​ load they are preparing to​ deliver to​ it .​
The performance details are an​ area where equipment can fail in​ leasing if​ they are not clearly stated .​
It’s important to​ make sure that both parties have those issues clarified before closing on any contracts or​ deals regarding performance issues.
Structure Defects
Structuring agreements is​ key to​ understanding where responsibility lies .​
An equipment leasing agreement needs to​ stipulate the​ structure of​ the​ deal .​
In other words, the​ salesman is​ unlikely be the​ primary contact for​ system defects .​
The primary contact may be the​ manager in​ charge of​ that account, but they will likely only handle negotiation issues .​
Customer support issues may be directed elsewhere .​
That structure and​ allocation of​ responsibility must be clearly spelled out in​ the​ contract .​
Equipment Hardware Leasing Specialties
When leasing computer equipment, there are often software leases that are required .​
It’s important to​ coordinate the​ duration of​ the​ software leases to​ be comparable with the​ duration of​ the​ equipment lease .​
It’s important to​ ensure the​ compatibility of​ all leased equipment with other equipment from different vendors .​
It’s also important to​ make sure that a​ project’s start and​ completion dates are commiserate with the​ equipment lease .​
Balancing the​ needs of​ the​ developers with the​ equipment support is​ a​ difficult thing to​ assess, but it’s important to​ make sure that the​ leases support the​ needs of​ the​ company small or​ large.
Solicitors Not Welcome
Solicitors (lawyers) are often not consulted during the​ initial drafting of​ equipment leasing .​
This is​ a​ mistake, especially for​ small businesses that do not possess an​ in​ house legal team .​
Lawyers can help smooth the​ transaction and​ avoid loopholes that might cause legal problems for​ both parties during an​ equipment lease .​
However, when utilizing a​ lawyer, it’s important to​ find one experienced in​ lease transactions.
The Results versus the​ Resources
Be sure to​ clearly define the​ need for​ the​ equipment lease .​
Most leasing companies see themselves as​ providing resources .​
Companies large and​ small are not looking for​ a​ resource as​ much as​ they are looking for​ a​ result .​
It’s the​ end of​ the​ line result they are seeking most of​ all.
Clear communication is​ important from the​ get go .​
When negotiating for​ an​ equipment lease, be sure to​ have all questions answered prior to​ agreeing .​
Companies make a​ mistake in​ leasing equipment from a​ vendor if​ they have trouble getting them on the​ phone or​ returning calls .​
Those issues can lead to​ service problems in​ the​ future.
Be Realistic In Expectations
Client companies must be realistic about what they are expecting .​
Vendors will usually negotiate and​ do their best to​ fill customer requirements, however the​ client company must also keep in​ mind industry standards and​ limitations .​
While technology continues to​ grow, it’s important to​ realize that not every goal has been achieved as​ yet.
Short Term Versus Long Term
The final and​ most important mistake made in​ equipment leasing is​ considering a​ contract as​ something that needs to​ be closed immediately in​ order to​ make a​ deadline that occurs in​ the​ next few weeks .​
Realistically speaking, avoiding looking at​ the​ long-term effects of​ an​ equipment lease may leave the​ client with a​ piece of​ equipment they do not need or​ a​ bad contract altogether .​
If their short-term goal is​ to​ launch a​ new product or​ get the​ foundation of​ a​ new project started, but the​ equipment will not help in​ the​ long-term goal, that should be addressed.
Equipment leasing provides numerous benefits to​ businesses large and​ small .​
It’s important to​ recognize the​ benefits, but to​ also avoid the​ pitfalls of​ mistakes that can be made when negotiating an​ equipment lease.

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