A rental agreement between two individuals is considered one of the legal methods of operating a vehicle.

 Do you need to know some legalities of a car rental agreement? Whether it’s a car rental Calgary under 25 or the newest car, you need to be savvy about the contract you enter into with the company.

The information that goes into the agreement

When drawing up a vehicle rental agreement, you should be sure to provide information about exactly which of the parties involved will be responsible for repairing the car. In most examples, when such contracts are concluded, the owner of the car must take responsibility for the repair work.

Obligatory clause: who bears the repair costs

Its current repairs must be handled directly by the lessee himself. It must be specified in the agreement that the lessee assumes responsibility for returning the machine in good condition, taking into account the normal wear and tear. 

The agreement must necessarily specify the persons who have the right to operate the vehicle. In most practical examples, the agreement can only include the name of the lessee himself. This means that only he has the right to use the vehicle. Its transfer to third parties is considered impossible. 

Also, lease agreements necessarily specify the specific purposes for which the machine will be used in the future. The term for which the lease agreement should be drawn up is considered one of the most important points in the execution of the document. The duration of the lease agreement may be counted in months or years. Also, information about the possibility of prolongation of such an agreement in the future should be provided.

Risk minimization

Detailed assessment of the current condition of the vehicle at the time of its provision to the tenant. Also, taking into account information about detected defects, specified in the “Act of acceptance” in combination with detailed provisions in the agreement on the timing and methods of informing the owner of the occurring difficulties and defects, traffic accidents.

Carngo draws up an Acceptance Act in several copies for each individual party, containing certain information about the recorded speedometer readings, numbers of accessories installed on the vehicle, as well as other information and possible comments.

All the mentioned information must be certified by the signatures of the parties, and the lessees must be informed about the rules of operation. Information that can be specified in the agreement on the rental of the car:

• Maintaining the normal condition of the vehicle when renting it

• The use of fuels and lubricants recommended by specialists

• Timely performance of technical inspections

• Repair work at designated technical centers

• Maintaining a good operating condition of the vehicle

Contents of the agreement

The vehicle rental agreement is drawn up according to a template. The contract should contain such information:

1. The subject of the contract is the transfer for operation of the machine to the lessee. A description of the vehicle must be given with maximum detail. All significant characteristics of the car must be listed.

2. The type of additional equipment, if any, installed on the car is indicated.

3. Information that the lessor is the rightful owner of the property in question. Carngo recommends checking whether there is information in the contract on whether the lessor is the owner of the machine or whether he is subletting it.

4. The specific purpose for which the machine is to be used must be displayed.

5. The landlord’s responsibilities, a list of which, includes making sure that the machine is used as specified in the agreement. If the lessee is late with the monthly payment, the return of the property may be demanded.

The landlord also has certain responsibilities:

• Provide the car in accordance with the agreed-upon terms of the agreement;

• To maintain the vehicle in normal technical condition, to carry out repairs;

• To provide information support in order to organize a sufficiently efficient use of the vehicle.

It would be correct to charge the lessee with the obligation to repair the vehicle in a situation where the vehicle is provided to him for a long period of time. During the term of the agreement, the lessee’s ability to gain access to the machine will be completely limited. Therefore, it would not be appropriate to make the vehicle available to him for repair work in the event of a minor malfunction.

The lessee has the right to operate the vehicle in accordance with its actual functional purpose. In addition, any citizen may be given the opportunity to rent or sublet the machine.

The specific responsibilities of the lessee

• to operate the vehicle in strict accordance with its functionality

• to pay the rent on time

• to return the vehicle at the end of the signed agreement

• paying the operating costs

Always implicit in this situation is the need for the lessee to take care of the vehicle in use as if it were his own. The fact that certain parts of the car have been damaged as a result of too aggressive driving may be considered as grounds for initiating legal proceedings.

The costs to be borne by the parties should definitely be addressed in the agreement. You should always specify the cost of the lease, as well as the terms of the lease. The duration of the agreement should also be specified. The number of penalties for possible rent delinquency should be specified in the agreement.

Conclusion

A rental car always has a fee and a term. The essence of the contract is defined by its terms, not its name. Thus, if a rental contract does not have a fee for use, then it is then considered a loan contract, no matter how it is called.

In the situation of renting a car from a director or other employee, there is a simple, quite logical question: can we not do something simpler and do it without a rental agreement in such a seemingly simple situation?

Carngo draws up understandable leasing contracts for trucks and cars. The rental process, in principle, becomes simple. It is therefore sufficient to have a basic knowledge of such contracts.