Sample form of an agreement for the free use of equipment

Under an agreement for the free use of equipment, one party transfers to the other party the right to use any equipment or tools for a period specified in the agreement.

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The subjects of this transaction are: the Lender - the person who provided some equipment for temporary use, and the Borrower - the person who uses the equipment or tool. In this case, the subjects can be both individuals and legal entities. The essence of the gratuitous use agreement is that the Borrower operates the equipment transferred to him free of charge. Often such transactions are concluded between organizations that are partners.

In its structure, a free use agreement resembles a lease agreement. The main difference between them is the absence in the type of transaction we are considering of a condition on the value of the right of use transferred to the Borrower. An agreement for the free use of equipment is drawn up in writing in order to stipulate in it all the conditions relating to the equipment and the right to use it.

Below we will look step by step at how to draw up such a document, what conditions should be outlined in it and what nuances you should pay attention to.

Agreement for free use of equipment

Kurgan
December 15, 2023

Tekhnika LLC, represented by General Director Nikolaev Nikolay Nikolaevich, acting on the basis of the Charter, hereinafter referred to as the Lender, and Construction LLC, represented by General Director Vitaly Vitalievich Volodin, acting on the basis of the Charter, hereinafter referred to as the Borrower, have entered into this agreement on the following :

The preamble of the document traditionally includes:

  • name of the type of transaction;
  • place and date of conclusion of the contract;
  • names and roles of the parties to the agreement.

The essential terms of this type of transaction are:

  • subject of the agreement;
  • term of the contract;
  • rights and obligations of the parties;
  • responsibility of the parties.

Item

Information about the subject of the agreement is written in the initial section of the document. The subject in our case will be the equipment itself. In the clauses of the agreement, it is important to give a comprehensive description of the instrument that is transferred for use to the Borrower. It looks like this:

The Lender transfers to the Borrower the right to use the instruments for the time specified in this agreement. These tools include: Makita DUC355Z Cordless Chainsaw (battery and charger included); Network hammer Makita HR2641; Cordless angle grinder Makita DGA504RF. These tools must be used by the Lender for their intended purpose. The transferred equipment is in good condition and belongs to the Lender on the right of ownership. This agreement is concluded for a period of: 11 (Eleven) months from the date of signing of the document by the Parties. Upon termination of the agreement, the property is transferred to the Lessor in proper condition or, by mutual agreement of the Parties, the term of the agreement may be extended.

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SUBJECT OF THE AGREEMENT\par \pard\plain\s2\f361\ql\fs20\b0\i0 \lang1049 \par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 1.1. The Lessor leases the _______________________________ equipment to the Lessee for ____ years, carries out its installation and commissioning in order to complete the _____________ line for the production of _______________________.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 1.2. The composition of the equipment leased is given in Appendix No. 1 to this agreement, which is an integral part of it.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 1.3. The total cost of equipment and work is ____________ __________________ on the date of commissioning of the equipment.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 1.4. The equipment is delivered by the Lessor, the cost of delivery is included in the total amount of the contract. i0\lang1049 2. TERM OF THE AGREEMENT\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 2.1. This agreement comes into force from the moment of signing.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 2.2. The rental period for the equipment by the parties to this agreement is determined at ____________, starting from the moment the Lessor fulfills its obligation to carry out installation and commissioning work.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 About the date of commissioning of the equipment operation The Tenant notifies the Lessor in writing.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 2.3. The parties to the agreement agreed that upon expiration of the agreement, the Lessee acquires ownership of the equipment that is the object of this agreement at the residual value. plain\qc\s1\f360\fs20\b0\i0\lang1049 3. OBLIGATIONS OF THE PARTIES\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\qj\fi540\ s1\f360\fs20\b0\i0\lang1049 3.1. The lessor undertakes:\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 3.1.1. Ensure the supply of equipment in accordance with the conditions specified in this agreement.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 3.1.2. Deliver the equipment with all its accessories and related documentation (use instructions, technical data sheets, etc.).\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 3.1.3 . Carry out equipment installation and commissioning.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 3.1.4. Provide the Tenant with the necessary assistance in matters related to the latter’s fulfillment of the terms of this agreement.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 3.1.5. Use the services of ______________________________ on the equipment that is the subject of this agreement for _____ years. In this case, the volumes must be at least ______________________ for __________; monthly volume - not less than ____________________________.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 Prices for services are specified in the annex, which is an integral part of this agreement.\par \pard\plain\qj\ fi540\s1\f360\fs20\b0\i0\lang1049 3.1.6. Carry out, at your own expense, major and current repairs, as well as other routine maintenance of equipment, in accordance with the instructions of the manufacturer, during the validity period of this agreement.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\ lang1049 3.1.7. Warn the Tenant about all rights of third parties to the transferred equipment (if any).\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 3.2. The tenant is obliged to:\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 3.2.1. Use the equipment transferred to him in accordance with its purpose.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 3.2.2. Follow the provisions of the manufacturer's instructions for operating the equipment.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 3.2.3. Make monthly payments for equipment rental. AND PAYMENTS\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 4.1. The rental fee for the use of equipment for _____ years is _____________________________________.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 The monthly payment is ________________________________.\par \pard\plain\qj\fi540\ s1\f360\fs20\b0\i0\lang1049 4.2. The parties to the agreement agreed to pay for the rent by offset, namely:\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 - The Lessor monthly, no later than _____ the day following the reporting month, presents to the Lessee invoice - an invoice for payment of the cost of work for the month;\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 - The Tenant provides the Lessor with services for ____________________ in the amount of at least _______________ per month and presents an invoice - invoice for payment of services no later than ____ the day of the month following the reporting month; ___________________________ with the execution of an act of offset of payments no later than the ___ day of the month following the reporting month.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 4.3. Upon expiration of the contract, the Lessee has the right to purchase the equipment at the residual value.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 4.4. When the conditions of clauses are met 4.1 and 4.2 of this agreement, after _____ years from the date of commissioning of the equipment, it automatically becomes the property of the Lessee without paying additional amounts.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 4.5. The transfer of equipment for rent is formalized by a delivery and acceptance certificate.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 4.6. When transferring the equipment into the ownership of the Tenant, the parties sign a bilateral equipment transfer act. i0\lang1049 5. RESPONSIBILITY OF THE PARTIES\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 5.1 . The lessor is responsible for deficiencies in the transferred equipment that were not specified by him intentionally or due to gross negligence when concluding this agreement. If such deficiencies are discovered, the Tenant has the right, at his own discretion, to demand from the Lessor the elimination of equipment defects free of charge or early termination of the contract and compensation for losses incurred by the Tenant.\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard \plain\qc\s1\f360\fs20\b0\i0\lang1049 6. EARLY TERMINATION OF THE AGREEMENT\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\qj\ fi540\s1\f360\fs20\b0\i0\lang1049 6.1. The Lessor has the right to unilaterally terminate this agreement early and demand compensation for losses in cases where the Lessee:\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 - uses the equipment not in accordance with its purpose ;\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 - does not fulfill responsibilities for maintaining equipment in good condition;\par \pard\plain\qj\fi540\s1\f360\fs20 \b0\i0\lang1049 - significantly worsens the condition of the equipment;\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 - does not fulfill the conditions of clause. 3.2.2 of this agreement.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 6.2. The Tenant has the right to unilaterally terminate this agreement early and demand compensation for losses from the Lessor:\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 - if deficiencies are discovered that make normal use of the equipment impossible or burdensome , the presence of which he did not know and could not know at the time of concluding the contract;\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 - if the equipment, due to circumstances for which the Lessee is not answers, will be in a condition unsuitable for use;\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 - if, when concluding the agreement, the Lessor did not warn him about the rights of third parties to the transferred equipment;\ par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 - if the Lessor fails to fulfill the obligation to transfer the equipment or its accessories and related documents, without which the equipment cannot be used for its intended purpose;\par \ pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 - if the Tenant fails to fulfill the obligation to carry out major repairs of the transferred equipment.\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\qc\s1\f360\fs20\b0\i0\lang1049 7. OTHER CASES OF TERMINATION OF THE AGREEMENT\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard \plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 7.1. This agreement is terminated in the event of liquidation of one party. PRIVACY\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 8.1. The terms of this agreement, additional agreements to it and other information received by the parties in accordance with the agreement are confidential and not subject to disclosure.\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\ plain\qc\s1\f360\fs20\b0\i0\lang1049 9. DISPUTE RESOLUTION\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\qj\fi540\ s1\f360\fs20\b0\i0\lang1049 9.1. All disputes and disagreements that may arise between the parties on issues that are not resolved in the text of this agreement will be resolved through negotiations on the basis of current legislation.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\ i0\lang1049 9.2. If controversial issues are not resolved during negotiations, disputes are resolved in court in the manner established by current legislation.\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\qc\s1\f360 10. FORCE MAJEURE CIRCUMSTANCES b0\i0\lang1049 10.1. The parties are released from liability for partial or complete failure to fulfill their obligations under this agreement if their fulfillment is prevented by an extraordinary and unavoidable circumstance under the given conditions (force majeure).\par \pard\plain\s2\f361\ql\fs20\b0\i0\ lang1049 \par \pard\plain\qc\s1\f360\fs20\b0\i0\lang1049 11. OTHER CONDITIONS\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\ plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 11.1. In case of reorganization of the Lessor, his rights and obligations under this agreement pass to the legal successor.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 11.2. In case of reorganization of the Tenant, his rights and obligations pass to his legal successor.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 11.3. In case of termination of this agreement, the equipment is returned to the Lessor.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 11.4. This agreement has been drawn up in two copies having equal legal force, one for each of the parties.\par \pard\plain\qj\fi540\s1\f360\fs20\b0\i0\lang1049 11.5. Addresses and payment details of the parties:\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 Tenant: _______________________________________________________\ par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 ________________________________________________________________________________\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 _______________________________________________________________________________\par \pard\plain\s2\ f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 Lessor: ___________________________________________________\par \pard\plain\s2\f361\ql\fs20\b0 \i0\lang1049 __________________________________________________________________________\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 ______________________________________________________________________________\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard \plain\s2\f361\ql\fs20\b0\i0\lang1049 SIGNATURES OF THE PARTIES:\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\s2\f361\ ql\fs20\b0\i0\lang1049 Tenant:\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 __________________________\par \pard\plain\s2\f361\ql\fs20\b0\i0 M.P.\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 Landlord:\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 __________________________\par \pard\plain\s2\ f361\ql\fs20\b0\i0\lang1049 __________________________ __________________\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\s2\f361\ql\fs20\b0\ i0\lang1049 M.P.\par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \pard\plain\s2\f361\ql\fs20\b0\i0\lang1049 \par \ pard\plain\s2\f361\ql\brdrt\brdrs\fs20\b0\i0\lang1049 \fs1\par }

Rights and obligations of the parties

The next essential condition is the section on the rights and obligations of the parties. This section specifies the obligations that the parties undertake to properly perform under this agreement. Based on the principle of freedom of contract, which is currently enshrined in the Russian Federation, Counterparties can specify various obligations by mutual agreement. We will try to highlight the main provisions. It looks like this:

The Lender undertakes to: Transfer the right to use the equipment specified in the paragraphs of this document, which is in good condition and meets the declared characteristics. Check the quality of instruments handed over for temporary use in the presence of the Borrower. Provide instructions on how to use the specified tools. Repair instruments if their breakdown was not the fault of the Borrower. Pay the costs associated with the maintenance and operation of the tools. Fulfill your obligations in strict accordance with this agreement. The borrower undertakes to: Use the equipment specified in the paragraphs of this agreement strictly for their intended purpose. In case of equipment breakdown, notify the Lender of this within 1 (One) calendar day. Treat the property provided for temporary use with care. Observe safety precautions when using tools. Fulfill your obligations in strict accordance with this agreement.

What does the legislation say about the gratuitous transfer of property?

The procedure is regulated by the Civil Code of the Russian Federation. In accordance with it, the gratuitous transfer of property means the transfer by one business entity to another of something without receiving reciprocal compensation. From a legal point of view, this implies a double interpretation, since a thing can be transferred both into ownership and for temporary use. In this case, the transfer will be a loan, since organizations do not have the right to give each other anything (clause 4, clause 1, article 575 of the Civil Code of the Russian Federation).

Before drawing up an agreement on the transfer of property for free use, entrepreneurs should familiarize themselves with the following articles of the Civil Code of the Russian Federation:

  • Art. 423 (here is the definition of a gratuitous agreement between the parties);
  • all articles of Chapter 36 (here we talk about the features of drawing up a loan agreement).

Responsibility of the parties

This section discusses situations in the event of which the Parties bear financial responsibility. By mutual agreement of the Counterparties, many circumstances can be included in this clause. We will focus on those that are the main ones:

The parties bear financial responsibility for non-fulfillment or improper fulfillment of their obligations under this agreement. The lender is responsible for deficiencies in the equipment leased by him that interfere with its normal use. If such shortcomings were specified by the parties when concluding the transaction, the Lender is not responsible. The risks of loss, damage or theft of property are borne by the Borrower.

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