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Drawing up a contract for your rental business can seem like a daunting task. There’s an endless list of scenarios to cover, and you’re unsure what to include or leave out. And then there’s the legal jargon, making things increasingly complex.
Luckily, rental agreements don’t have to be long, jargon-filled legal documents. At Booqable, we prefer contracts that are written in plain, understandable English. Let’s face it. Would you feel like reading paragraphs twice? And would you sign a document you haven’t fully understood? Keeping things focussed and to the point helps reduce friction and enables you to finish paperwork faster (and get your invoices paid sooner).
Without a contract, customers may be unaware of what they’re paying for, and the scope of what you’re offering may seem unclear. All this could cause someone to take advantage of you and lead to confusion around deposits, cancelations, return dates and other important deadlines.
While contracts may be the least of your concerns in the early days, we encourage you to spend some time and effort crafting an easy-to-follow document that explains what both parties are agreeing to. We’ll share some ideas to help you get started. Remember, you don’t have to include them all. Just pick the ones that seem appropriate for your business.
If you use Booqable to create contracts, quotes, and invoices, you’re already halfway there. Most information is displayed automatically, such as customer details, address information, product specifications, pricing and tax calculations, and pick up and return dates. Here are some more elements to include:
Provide a brief overview of which parties enter the agreement. Include company names and addresses, and specify to what both parties agree. This can be as straightforward as stating “This agreement is entered into between [your company] and the customer listed above. By signing this contract, the customer agrees to the following terms and conditions”.
Describe whether a retainer or non-refundable deposit is required. If applicable, include your security deposit and state that a signed contract authorizes you to charge the customer’s debit or credit card on file for any payments and fees due under the agreement. Include clear payment terms, or else you could be waiting for weeks before you receive payment.
Pro tip: Don’t forget to include financial consequences of late returns, repairs, and last-minute changes.
When your company delivers rental equipment to customers, include a paragraph about who’s responsible for transportation, staging, and pickup fees. Define the scope of deliveries and pickups, which for example might not include setup or breakdown. You don’t want customers to ask for more work without paying for it, just because the scope of your delivery process was unclear.
Explain the procedure when items are damaged, stolen, or lost. Does the customer have to pay for repairs and the timeframe a product was temporarily unavailable? Detailing liability and insurance will prevent discussion about who’s responsible for what when items are missing, damaged, or destroyed.
Describe to what extent people can make changes after you’ve processed their reservation. Define what happens when someone cancels an order before the final balance is due (“If the order is canceled before the final balance is due, the deposit will be forfeited”) or after the final balance is due (“If the order is canceled after the final balance is due, all payments will be forfeited”). This procedure depends on how you’re handling payments.
You’re all set! The contract is legally binding when both parties have signed the agreement.
Even though 99% of rentals run smoothly, a well-written contract helps clarify your company’s terms and smooths out payment issues. Although we’re fans of short, easy-to-follow agreements, the size of your contract will relate to what you’re offering and the complexity of your products and services. It’s imperative to create a contract that’s relevant to your business type. We also believe it’s crucial not to intimidate potential customers with a lengthy, 10-page document. A healthy balance between water-tight and accessible is what you’re going for when drawing up rental agreements.
Important: We are not professional legal advisors. While we are happy to provide best practices regarding rental contracts, these tips may not be appropriate for you. The contents of this piece should not be considered legal advice. Always consult your advisor or lawyer to address the specifics of your unique situation.