Are you reading your lease agreements?
You will be shocked by what some companies include in the fine print. If you plan to lease equipment or have a lease in place, you owe it to yourself and your company to read the fine print carefully.
What to look for:
- Will your lease be with the company or sold to a third party?
- Does the lease contain a “Hell or High Water” clause?
- Does the sales representative know what a “Hell or High Water” clause is?
What is a “Hell or High Water” clause?
A “Hell or High Water” clause in a lease contract binds the purchaser to make the specified payments in the agreement regardless of any difficulties they may encounter. Most often the lease is either reassigned to a third party lessor or set up as a separate transaction with a third party lessor
through a finance lease or Equipment Rental Agreement.
The clause states that the lessor claims no liability when the vendor delivers defective goods, fails to service the equipment, the equipment ceases to operate properly during the term of the lease or the vendor files for bankruptcy. The “Hell or High Water” lease contains provisions precluding any warranty liability whatsoever.
Why is this important?
Under the provisions of a “Hell or High Water” lease, the lessee (your company) can be required to pay hundreds of dollars a month over several years for equipment that never functioned, becomes unusable or is destroyed during the lease term.
It is not only possible, it’s probable in the case of most equipment leases since virtually all equipment leases are with third party lessors. Read actual court cases of “Hell or High Water” leases involving equipment leases with third party leasing companies. You will find that the court ruled against the customer (lessee) because of a “Hell or High Water” clause.
Our We Make It Right™ Guarantee
RJ Young will not include a “Hell or High Water” clause in any lease. In fact, we do the opposite with our We Make It Right™ guarantee. For nearly 60 years we have focused on excellence in customer care, and we are so confident in our ability to outperform any of our competitors in the area of
customer service that we finance virtually all of our leases ourselves.