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Car Rental Agreement

You’re looking to commercialize a vehicle by renting it out and allowing other people to use it. Vehicles are large investments and require protection. In various legal jurisdictions, this protection is necessary to keep your investment safe from disputes and lawsuits.

Make sure that proper inspection procedures are taken care of, and that the customers renting know that they must follow all laws for your area. Protect your company from harm, damages, and liabilities by signing a contract and including everything in writing.

You’ll need to do all of the proper research and homework first, but this template will give you a head-start and a good framework. You should always consult a lawyer though before finalizing any contracts.

Download the template today and edit it using any version of our PDF Reader apps.

Starting any new business can be a daunting task. It’s made even more difficult by today’s litigious societal rules, with everyone jumping at the chance to open lawsuits for everyone else. Because it’s so easy to get damages from a company like yours, you need to work harder than ever to make your contracts fair and to decrease liability and the chance of any disputes as much as possible.

Make your contracts fair, and there’s a much higher chance that they will be deemed enforceable by a court if it ever comes to such a decision. By including clauses that ensure understanding and reasonable review, your contracts have much less of a chance of being thrown out. By including survivability clauses, some elements of your contract may even survive the termination of the contract. It’s important to understand the grey areas and the limitations of any legal contract before you begin operating and working. Not all agreements will protect you from legal action, just because they have provisions limiting legal action and disputes.

Any agreement needs several principal components to be legally binding. Without these components, the contract components, such as requirements for insurance, or restrictions on use type, might not be enforceable either. You need to include the parties, term, covenants by the contractee, and considerations by the contractor. Without these provisions, no contract can be enforceable. In addition, there are a few more provisions that are required, which are unique to the situation of renting a vehicle. When you purchase a vehicle, you can use it in however purpose you want. It can be used for commercial purposes, or it can be modified, and even re-sold. However, when you are using a rental vehicle, it is subject entirely to the contract you have with the rental company. When you’re a rental company, you need to add the typical “subject to terms and conditions” portions of the agreement, otherwise, the users of the vehicle might be allowed to do whatever they want with it. This requires you as the business owner to think of a lot of different scenarios and determining ones that might be likely to cause damage or liability.

Renting a vehicle can be a low-profit margin business, with a lot of competition coming from other fleets and companies. When your company sets up in an area, especially that is popular with other companies already, you need to ensure that the rental fees are established and that you are insulated against changes in the cost of doing business. One way of insulating the company from such costs is to require the customer to pay for fuel. Although it can be seen as a hassle by the customer, your company won’t be liable for changes in fuel prices, and potentially lose income as a result.

The fees that you charge are normally based on the mileage that the renter drives or the amount of time that the renter drives for, or a hybrid of the two. In the case of the hybrid approach, there are usually GPS counters inside of the vehicle, which tracks the vehicle everywhere it goes and calculates the price based on time and distance. These systems can even integrate with the OBD2 ports, also known as on-board diagnostics, which can help to monitor the vehicle’s status, including fuel level, and whether or not the vehicle requires maintenance. You may even be able to reward your customers, using this system, based on how gently they push the accelerator or brakes and extend the life of your vehicles.

When creating a contract in any physical location, especially when the contract has to do with a physical asset such as a vehicle, you need to follow the laws of that locale. The country, state, city, county, and municipality all have their own particularities when it comes to the law. Although agreed upon in a contract, if the law contradicts any provision, even if the law didn’t exist at the time of signing the contract, the law may cause the contract to become invalid. Your company must keep in mind specific regulations and rules that are in effect, and possibly scheduled or expected to be passed in the future, as they may significantly change the way you must do business.

One last aspect that we must touch on is insurance. In this template, there is a section to talk about the requirements for insurance, but it is also important to note that there may be requirements by law. Be sure to meet those requirements at least, and it is best to quote the particular statutes directly, not to interpret them in any way. Next, you may add on additional restrictions if your company wishes to require even more protection than is given by law.

Your contracts and agreements are only as good as your lawyers and business strategists that make them. Have an awareness of the other companies and competition on the market, as well as the governments and courts, in order to know if your contract is reasonable. Don’t make it too complex and with too many provisions; it should resemble other contracts from your locale and business industry. Get started by covering the basics with this rental agreement template, and your company will be off to a good start.

If you have received or desire to issue any legal document, you must consult a lawyer. Kdan Mobile provides this template for educational purposes only, and you are always responsible for the creation of any legal agreements you sign. By clicking “download” you agree to indemnify and hold harmless and inure Kdan Mobile for any damages incurred as a result of the use of said template for commercial purpose.


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