Equipment Lease Agreement With Option To Purchase Template for New Zealand

An Equipment Lease Agreement With Option To Purchase is a specialized contract used when one party wishes to lease equipment while maintaining the flexibility to purchase it in the future. This document is particularly relevant in New Zealand's commercial environment where businesses seek to manage cash flow while retaining the possibility of asset ownership. The agreement comprehensively addresses both the leasing and potential purchase aspects, incorporating requirements under New Zealand law including the Contract and Commercial Law Act 2017 and Personal Property Securities Act 1999. It's commonly used for high-value equipment acquisitions where immediate purchase might not be financially optimal or where the lessee wants to evaluate the equipment's performance before committing to purchase. The document includes detailed provisions for equipment use, maintenance, payments, and the specific terms under which the purchase option can be exercised.

1. Parties: Identifies and provides full details of the lessor and lessee

2. Background: Sets out the context of the agreement, including the lessor's ownership of the equipment and lessee's desire to lease with option to purchase

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Equipment Description: Describes the equipment being leased and confirms its condition at commencement

5. Term and Commencement: Specifies the duration of the lease and its start date

6. Lease Payments: Details the lease payment amounts, frequency, and payment methods

7. Option to Purchase: Specifies the terms and conditions of the purchase option, including the purchase price and how/when the option can be exercised

8. Delivery and Return: Outlines the arrangements for delivery at commencement and return at termination (if option not exercised)

9. Use and Maintenance: Sets out how the equipment may be used and basic maintenance requirements

10. Title and Risk: Clarifies ownership rights and allocation of risk during the lease period

11. Lessee's Obligations: Lists the key responsibilities and obligations of the lessee

12. Lessor's Obligations: Lists the key responsibilities and obligations of the lessor

13. Insurance: Specifies mandatory insurance requirements

14. Default and Termination: Details what constitutes default and the consequences, including termination rights

15. General Provisions: Contains standard boilerplate clauses including notices, governing law, and dispute resolution