Many companies today rely on finance leases to handle many of their important business functions. It is often more cost effective to rent some types of equipment than to purchase them outright. For example, copy machines, credit card equipment, telephone systems, and furniture may all be provided through leasing. While these types of arrangements are quite popular, businesses need to protect themselves against unfair finance leases.
Read the Lease
Companies usually meet with a representative who offers the equipment to them with a finance lease. It is important to note, however, that many of these leases are not actually provided through the vendor, but through a third-party instead. This finance company may not offer the specific performance and operation guarantees that you thought you were getting. For this reason, it is necessary to read the contract thoroughly before signing it.
Have the Lease Reviewed by Your Attorney
Contracts can be complicated, lengthy, and difficult to understand, and leases are no exception. Do not allow the representative to pressure you into signing a lease contract until you have had it reviewed by a qualified business attorney. The lease may have some clauses that are unfair to you and these should be challenged before signing the document. Once the contract is signed, it will be difficult to make changes to it. Consider other options available to you, rather than signing a lease that could be problematic.
Reduce Your Exposure
Finance leases often contain statements that could cause your company significant financial obligations under some circumstances. There could be penalties for ending the contract early. These charges could apply even if you are not happy with the service you have received, or if the equipment is defective. This could cause problems and expenses down the road. It is a good idea to try to negotiate the contract so that your company has the least exposure possible. If that is not possible, look to other vendors until you find a more reasonable provider.
Resolving Lease Disputes
When companies default on the agreement or want to get out of a lease contract because of serious problems, it can be the basis for legal action. Legal disputes that revolve around finance leases are complicated and require assistance from an experienced business attorney. Finance leases are legal documents and therefore, disagreements could result in lawsuits. If a problem arises with an unfair lease, negotiation may be possible in order to resolve the situation before it escalates.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding Unfair Finance Leases, or any other litigation matter, please feel free to contact us at 480.461.5300, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.