A lease hire is a contractual document which outlines the terms and conditions agreed on between the lessor and the lessee regarding a particular transaction. It is expressly used for purposes of hire where the question of purchasing the object or property in question does not arise. It is active for the duration of the transaction and lapses after a certain date. But till it is active, a lease hire is also legally binding under the jurisdiction of the domicile under which it falls. It must be treated seriously as the consequences of a breach of contract can entail severe punishment.
- A lease hire must be formulated keeping in mind all the relevant documentary information of both client and servicer in mind.
- There should be as much transparency as possible to avoid a legal conflict. Thus all details of payments, the type and nature of the goods in question and the modes of payment must be addressed along with all the relevant dates of the lease hire.
- The activation and the termination of the lease must be kept in mind.
The fact that it is legally binding must always be kept in consideration while framing any such document. Thus all efforts must be taken to ensure comprehensiveness and lucidity. The advantage of a lease hire is the transparency it involves. Both parties are aware of the pros and cons of the deal before they actually embark upon it. The disadvantages include the inflexibility once the document has been forged, signed and got the necessary legal approval.