Car Lease Agreement Template

PandaTip: This Car Lease Agreement Template is to be used when leasing (hiring) a car or other vehicle. It is not relevant to hire-purchase arrangements related to cars or other vehicles. If you are leasing a vehicle which is not a car you should update Schedule A accordingly.

This Car Lease Agreement (the “Agreement”) sets out the terms and conditions upon which [LESSOR NAME] (the “Lessor”), being a Company duly registered under the laws of [STATE] with registered number [REGISTERED NUMBER] and having its registered address at [ADDRESS], shall lease a Vehicle to [LESSEE NAME] (the “Lessee”), being a Company duly registered under the laws of [STATE] with registered number [REGISTERED NUMBER] and having its registered address at [ADDRESS] (together, the “Parties”).

PandaTip: In this sample Car Lease Agreement the “Lessor” is the person who owns the vehicle and the “Lessee” is the person who will lease it. The Lessee is not necessary an Approved Driver (the list of drivers is set out in Schedule B). The Lessee may be a natural person or a legal person (like a company). If the Lessee is a natural person you should change the above clause to reflect that fact.

WHEREAS: The Lessor is the registered owner of the Vehicle.

WHEREAS: The Lessor is desirous of leasing the Vehicle to the Lessee on such terms as are set out in this Car Lease Agreement and The Lessee for his part is desirous of leasing the Vehicle from the Lessor on said terms.

NOW, THEREFORE, IT IS HEREBY AGREED as follows:

1. DEFINITIONS. In this Car Lease Agreement:

1.1“Vehicle” and “Car” shall both mean the vehicle set out in Schedule A regardless that the Vehicle may not be a car.

1.2 “Approved Drivers” shall mean those persons set out in Schedule B.

1.3 “Lease Rates” shall mean the Rates set out in Clause 4.

1.4 “Date of Collection” shall mean the date set out in clause 5.2.

1.5 “Place of Collection” shall mean the place set out in clause 5.2.

1.6 “Return Date” shall mean the date set out in Clause 5.3.

1.7 “Place of Return” shall mean the place set out in clause 5.3.

1.8 Unless it is evident from the context and having regards to the generality of this Car Lease Agreement that a clause intends to mean otherwise: words denoted in the singular only shall include the plural and vice versa; words denoted in any gender shall include all genders; and, terms denoting people or persons shall include both natural and legal persons (such as corporations) and vice versa.

1.9 The heading names in this Car Lease Agreement are provided as reference only and do not form part of the Agreement.

1.10 This Car Lease Agreement may be executed in both English and other languages. If there is a conflict between the Agreement in its various translations the English version shall prevail.

1.11 The illegality or unenforceability of any clause (or part thereof) shall have the effect of voiding that clause (or part thereof) only and not the entirety of the Agreement.

1.12 This Car Lease Agreement may be executed either in one original or in two counterparts.

1.13 The terms of this Car Lease Agreement shall be deemed to be binding on both Parties based on their respective conduct notwithstanding any error or defect in the execution of this Car Lease Agreement.

2. OBLIGATIONS OF THE LESSOR It is agreed that the Lessor shall make the Vehicle available to the Lessee for the duration of this Car Lease Agreement to be collected from the Place of Collection on the Date of Collection.

3. OBLIGATIONS OF THE LESSEE It is agreed that the Lessee shall make use of the Vehicle during the operation of this Car Lease Agreement in accordance with terms of this Car Lease Agreement and will return the Vehicle to the Place of Collection on or before the Return Date with the same fuel level as when the Vehicle was taken. It is further agreed that the Lessee will pay the Lease Rates promptly and shall observe the terms and conditions set out in Clause 7.

4. LEASE RATES It is agreed that the Lessee shall pay the Lessor [RATE]. Said rates are to be paid net of any and all taxes or duties.

PandaTip: The lease rates should be described in as much detail as possible, the car or other vehicle can be leased for a flat fee, a weekly fee, a monthly fee, per trip or per mile. Examples include “…the sum of 5,000 USD”, “…the sum of 500 USD per calendar month paid on the last day of each month the Car Lease Agreement is in effect.”, “…the sum of 0.50 dollars per mile the Vehicle is driven to be payable monthly and calculated by reference to the vehicle odometer.

5. DURATION OF AGREEMENT AND DATES AND PLACE OF COLLECTION AND RETURN It is agreed that:

5.1 This Car Lease Agreement shall commence on the date of its execution and shall have effect until any of the following occurrences at which point the Agreement will end:

5.1.1 the failure of the Lessee to pay any Lease Rates due under this Car Lease Agreement within 60 (sixty) days of them falling due provided that such delay was not expressly agreed between the Parties.

5.1.2 the provision of 14 (fourteen) days’ notice in writing by either Party.

PandaTip: If you wish to change the amount of notice of termination of the Car Lease Agreement or allow for different notice periods whether or not notice is provided by the Lessor or the Lessee you can do so by changing the above clause.

5.1.3 the Return Date.

5.2 The Vehicle shall be collected from [LOCATION] on [DATE].

5.3 The Vehicle shall be returned to [LOCATION] on [DATE].

6. USAGE OF VEHICLE It is agreed that the purpose of the Vehicle shall be commercial only.

PandaTip: Amend this clause to allow for other uses (such as for recreational use) or you can replace this with a clause stating: “It is agreed that the Lessee may put the Vehicle to any reasonable use he sees fit.”

7. WARRANTIES AND INDEMNITIES It is agreed that:

7.1 Both Parties warrant that they have the necessary power and approval to enter into this Car Lease Agreement.

7.2 Both Parties warrant that they are not aware of anything in their reasonable control which will or could have an adverse effect upon their ability to perform their respective obligations under this Car Lease Agreement.

7.3 The Lessee undertakes to pay all Lease Rates to the Lessor promptly and not to unreasonably withhold payment.

7.4 The Lessee undertakes to permit only Approved Drivers to operate the Car during the operation of the Car Lease Agreement.

7.5 The Lessee undertakes that all Approved Drivers shall only operate the Car when sober and fit to drive and will follow the rules of the road at all times.

7.6 The Lessee undertakes to return the Vehicle on written instruction from the Lessor.

7.7 The Lessor undertakes not to request the return of the Vehicle unreasonably.

7.8 The Lessee undertakes not to take the vehicle out of [REGION] without the prior written consent of the Lessor

PandaTip: We suggest including either the state or country but if the car can be driven anywhere then you can remove this sub-clause and renumber the following clauses.

7.9 The Lessee undertakes to pay all fuel costs.

PandaTip: If you wish the Lessor to bear fuel costs you can change this sub-clause. You can also split the fuel costs between the Lessor and Lessee by amending this clause.

7.10 The Lessor undertakes to insure and keep insured the Vehicle during the

operation of this Car Lease Agreement.

PandaTip: You can amend this clause if you want insurance to be borne by the Lessee instead. You may also want to detail the type of insurance required, for example: “fully comprehensive,” “third-party, fire and theft,” or “minimum required by law.”

7.11 The Lessor undertakes to meet the costs of all routine vehicle maintenance and repairs due to normal wear and tear and expressly excepting damage caused by a collision. The Lessee may pay for the above and then recover the cost from the Lessor only with the prior written agreement of the Lessor.

PandaTip: Amend this clause if you want the Lessee to meet the costs of routine maintenance or to split these costs between the Lessor and Lessee.

7.12 Where the Vehicle requires towing, garage services and repairs for any reason this shall be arranged by the Lessee but with the prior approval of the Lessor.

7.13 The Lessor undertakes to replace the vehicle with a similar vehicle if the vehicle is irreparably damaged or beyond the economic cost of repair.

7.14 The Lessee agrees to keep the Vehicle clean.

7.15 The Lessee agrees to keep a mileage and trip log.

PandaTip: This sub-clause can be removed and the following sub-clauses renumbered if desired.

7.16 In the event of a collision the Lessee undertakes to reimburse any costs and loss howsoever arising as a result of the collision which are not covered by the insurance including but not limited to the payment of the deductible (or excess) on the insurance policy (if any).

PandaTip: This subclause can be removed and the following subclauses renumbered if desired.

7.17 The Lessee undertakes not to sub-lease the Vehicle.

7.18 The Lessee agrees not to use the Vehicle for any purpose other than those set out in clause 6.

7.19 The Lessee undertakes to inform the Police, the Lessor and the Insurance Company immediately if the Vehicle is stolen or is suspected of being stolen.

7.20 The Lessor accepts no obligation for the payment of any tax burden on the Lessee arising for any reason including but not limited to tax on Benefits in Kind.

7.21 The Lessee agrees to hold harmless, to indemnify and to keep indemnified the Lessor for any and all losses howsoever arising in connection with injury, death and damage to property caused by the Vehicle.

7.22 The Lessee agrees to hold harmless, to indemnify and to keep indemnified the Lessor for any and all losses howsoever arising  due to late payment of the Lease Rates or late return of the Vehicle.

7.23 The obligations and benefits under this Car Lease Agreement may be assigned by either Party provided that the other Party first agrees in writing to said assignment.

7.24 The failure or delay by either Party to enforce any term of this Car Lease Agreement or to act upon a breach of any term shall not constitute a waiver of their rights.

7.25 Both Parties warrant that they will not do anything to hinder or adversely affect the execution of the other Parties’ duties under this Car Lease Agreement.

7.26 Both Parties warrant that they will submit to the exclusive jurisdiction of the courts and legal system stated in clause 10.

8. VARIATION Any variation to this Car Lease Agreement shall be made in writing and signed by both Parties with the exception of variations of Schedules A and B which can be emended by annexing a replacement version of the Schedule which must be signed and dated by both parties.

9. NOTICES Any notice served under this Car Lease Agreement shall be made in writing and shall be considered served if it is handed to the other Party in person or delivered to their last known address or any other such address as the Party being served may have notified as his address for service. All notices shall be delivered in English.

10. GOVERNING LAW, DISPUTES AND ARBITRATION It is agreed that:

10.1 This Car Lease Agreement is made under the exclusive jurisdiction of the laws of [STATE AND COUNTRY].

10.2 Disputes under this Car Lease Agreement shall be subject to the exclusive jurisdiction of the courts of [STATE AND COUNTRY].

10.3 Notwithstanding the terms of 10.2 both Parties agree that in the event of a dispute they will enter into arbitration before the International Chamber of Commerce before a single arbitrator whose decision shall be final.

PandaTip: If you do not wish to include the right to arbitration, or if you wish to choose a different arbitrator then please delete or amend this clause. Arbitration is a private arrangement (unlike a legal case) and is sometimes included to demonstrate to the Parties that they will not be able to achieve any benefit by threatening to sue but must rather be willing to go through a fair arbitration hearing.

IN WITNESS WHEREOF, each of the Parties has executed this Car Lease Agreement:

[LESSOR]

_________________________________ ______________

[NAME], [TITLE]                                            DATE

[LESSEE]

_________________________________ ______________

[NAME], [TITLE]                                           DATE

Schedule A

Particulars of the Vehicle Being Leased

Vehicle Registration Number [VEHICLE REGISTRATION]

Vehicle Make: [VEHICLE MAKE]

Vehicle Model: [VEHICLE MODEL]

Vehicle Color: [VEHICLE COLOR]

Year of Manufacture: [VEHICLE YEAR]

Engine Capacity: [VEHICLE CAPACITY]

Vehicle Identification Number (VIN): [VIN]

Mileage at start of lease: [MILEAGE]

Fuel Type (Diesel, Petrol, LPG, Electric): [FUEL TYPE]

Fuel Level at start of lease: [FUEL LEVEL]

Details of Insurer (name and address): [INSURER]

Insurance Policy Number: [POLICY NUMBER]

PandaTip: If this lease agreement is for a vehicle which is not a car you may need to amend some of the above information.

Schedule B

Particulars of the Approved Drivers

The following shall be the Approved Drivers

          Name

             Address

  License Number

 State License Issued In

PandaTip: If you wish to remove or add approved drivers you can do so here by adding or removing rows from the above table. If you prefer to allow any driver then you can remove the above table and specify that here. For example: “Any person aged 18 and over holding a valid driving licence.”, or “Any employee of ABC Corp Limited who holds a valid driving licence.”.

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