Introduction to Trailer Rentals
Essential Guide to Crafting a Trailer Rental Agreement
A trailer rental agreement is less common than, say, an RV rental agreement, so it’s important to understand some of the basics of a trailer rental beforehand. A trailer rental can come in a couple of forms, including a basic flatbed trailer or a customized enclosed trailer. Typically available for rent through companies that also rent out moving trucks, trailers can be generally divided into two categories — open trailers and enclosed trailers. Open Trailers: Open trailers are what most people think of when they picture a trailer used to move. Typically built on a standard flatbed base, these trailers often have low decks and no enclosed area. They’re often available as simple two-axle trailers that can hold a reasonable amount for short distances, or as large, heavy-duty trailers that are rated for long-distance hauls. Enclosed Trailers: Enclosed trailers can be similar to smaller RV trailers , as they’re often fully enclosed, sometimes with full-height doors and a padded, carpeted interior. These trailers can be used not only for moving, but also for storage, temporary office areas or even as a temporary bar or tavern during large events and festivals (particularly those offering serve-alcohol licenses). Depending on your needs, you’ll want to carefully read a trailer rental agreement before signing it to ensure your safety. Make sure you’re familiar with the limitations on the trailer, including any restrictions on weight or the type of items you can carry, both for your safety and the safety of others. Be sure to consider the type of vehicle you’ll be using to pull the trailer, how stable the trailer will be on the road and how the trailer will operate as you handle turns and other common driving maneuvers. If you’re unsure about the operating procedures of a trailer rental, ask the rental company for clarification.
Components of a Trailer Rental Agreement
The key elements of a trailer rental agreement should address the following:
Parties. The names and addresses of the parties involved in the rental agreement.
Rental Period. The dates and times that the trailer will be rented.
Rental Fees. The amount of rental rate per hour, per day, per week, or per month.
Deposit. The amount of the security deposit that will be held until the equipment is returned. Typically, the security deposit is equal to the cost of one (1) rental payment.
Payment Terms. Payment terms for security deposit and rental fees. Rental agreement should establish whether the security deposit is used as the rental fee for the last month.
Early Termination. The conditions under which the rental agreement may be terminated early.
Use of Items. A description of the use of the items rented, including any restrictions or limitations on the use of the item.
Return of Items. The requirements for returning the items, including cleaning and repair if applicable.
Late Return. The charges that may be assessed for late return.
Obligation of Renter. A description of the obligations of the renter to the owner of the items, including maintenance, liability, and repair obligations.
Obligation of Owner. A description of the owner’s obligations, including liability limitations, repair, maintenance, insurance, and other obligations.
Liability. Clarification of the extent to which each party assumes liability for damages or loss of the items. Limitation of Liability. Limiting the liability of the owner for damages and losses is critical. If the owner intends to limit their liability for any lost or damaged items, then they must include a limitation of liability clause in their rental agreement.
Insurance. Determining whether the owner intends to provide the renter with insurance for the items, or to require the renter to provide their own insurance coverage.
Termination. The terms under which the rental agreement may be terminated by either party.
It’s important to include all terms in a rental agreement for the rental items. Otherwise, the parties may have different expectations and allegations of breach may arise, requiring litigation to resolve. In addition, the law generally requires that contracts be in writing when equipment valued at more than $500 is being leased.
Example Trailer Rental Agreement
As we mentioned, an agreement should detail all the tasks and responsibilities of the lessor and lessee. The following template provides a sample structure for a trailer rental agreement:
- Agreement Date.
- Lessor’s and Lessee’s full names and contact information.
- Trailer Specifications.
- Period of Use.
- Rental Fee and Payment Information.
- Security Deposit Terms and Conditions.
- Insurance Requirements.
- Lessor and Lessee Responsibilities.
- Damage Policy and Costs for Repairs and Maintenance.
- Indemnification.
This layout is a mere suggestion, and you should leave ample room to add in more relevant details. A well-crafted rental contract will protect both lessor and lessee by ensuring that both parties understand their full responsibilities before signing the lease.
Legal Requirements and Local Laws
In addition to this agreement there are also legal considerations, such as ensuring that the rental agreement complies with applicable local, regional and federal laws. Oftentimes there are specific region or state laws in place that regulate the operation of trailer rental businesses. In addition, you may be subject to zoning regulations that only permit your business in certain areas or locations. Other regulations such as sales or service taxes, permits, rights of way and easements may be additional factors you must consider.
Further , consider whether you are bound by local or regional regulations that govern the retention of tenant data and the need to protect customer privacy. There may also be duty of care laws that will make you responsible for anything that happens with the trailer after it is rented to a customer. Some states have specific regulations for vehicle or trailer rental companies, so you should contact a local realtor or chamber of commerce to learn about any of the above regulations that might apply.
Personalize Your Trailer Rental Agreement
While the templates we provide offer a solid foundation for various rental scenarios, many businesses have unique circumstances that beg for specific clauses. We are happy to discuss your specific situation and generate an agreement that suits your needs. The following examples are commonly found in comprehensive rental agreements:
- Indemnification Clause: A rental agreement often includes a clause in which the renter agrees to indemnify the owner against any claims or legal actions arising from the use of the trailer. This serves to protect the owner from lawsuits originating as a result of some action or negligence on the part of the renter.
- Governing Law Provision: This section specifies the state or jurisdiction that will govern legal disputes arising out of the agreement. Depending on how you operate, you may want to recommend arbitration as the dispute resolution process, as well as select the language in which the agreement will be processed.
- Designated Use: While most people understand that a cargo trailer is presumably used for transporting products, your business may specialize in a niche market that you want to be very explicit about within your agreement. You may wish to limit the use of your trailer to only one purpose that effectively captures the entirety of your company’s operations. As an example, if you rent trailers to auto racing businesses, the use clause may read as such: "The Renter shall use the Trailer exclusively for the transportation and storage of goods and equipment related to the manufacture and distribution of body and engine components for race cars and competition vehicles."
- Liability Coverage: Perhaps your business floats a "no fault" liability coverage policy. Implementing a clause that releases your business from making damages or injuries payments as a result of your customer’s use of the trailer can benefit you in the long run.
How to Draft an Effective Trailer Rental Agreement
Writing a clear and effective trailer rental agreement is an essential part of protecting your business. Following these tips for drafting such a contract can help you to avoid disputes and set the terms efficiently and effectively.
Using straightforward, simple language can help to ensure that the agreement is easily understood by both parties. If you use terminology that is complex or that the parties do not understand , it may cause disputes down the road if something happens.
It is also important to be clear about the terms of the agreement. Make sure that you avoid leaving any ambiguities in the agreement. If you are not specific about what your duties and responsibilities are, it could cause problems.
Before either party signs the agreement, each should take the time to review it fully. This helps to ensure that both parties fully understand the terms before signing. If there are still questions after the review, be sure to have them answered before signing.
