The world is full of equipment that can be rented or sold to consumers or business interests, from medical and construction equipment to golf carts and water sports vehicles. Even dumpsters, scaffolding, and party equipment.
As an entrepreneur, you can use your knowledge and interests to launch a business that offers equipment rental booking, outright sales, or both.
With that being said, when you sell equipment, you want to make sure everyone understands the terms associated with the transfer of ownership, especially since something like a medical ventilator machine could go for $30,000 to $50,000, while a Caterpillar Excavator could cost anywhere from about $100,000 to $850,000.
These large sums are why you need an equipment sales contract in place. What are equipment purchase agreements, and what should you include in yours?
Free Downloadable Equipment Purchase Agreement Template
Need to create a standardized purchase agreement for selling used equipment? We’ve created a free downloadable PDF template you can start using today!Need a rental purchase agreement? Click here to download your free template!
*Consult with your lawyer to ensure this template correctly applies to your location, county and contains the proper terms and conditions before use.
What Are Equipment Purchase Agreements?
As a business owner, you’ll turn to all kinds of targeted software solutions to run your operation, from QuickBooks for managing your finances to Google Analytics for tracking the success of your online efforts and gaining insights that help you improve.
You can also find a range of templates to help you do everything from sending out email blasts to creating professional invoices.
An equipment purchase agreement is a legal contract that spells out the terms of a sale, as agreed upon by the seller and the purchaser. It serves to protect both parties in different ways.
The agreement protects the seller from claims that the equipment is not what the buyer agreed to purchase. However, it also protects the buyer if they actually receive the wrong piece of equipment or the condition is not as stated.
A proper equipment purchase agreement template will include everything you need to ensure that both parties understand the terms of a sale, but you may have to tweak it a bit to make it suit your particular needs.
Free Equipment Purchase Agreement Template
The easiest way to get started when it comes to making your own sales contract is with a simple equipment purchase agreement template. After all, why start from scratch when someone has already done the heavy lifting for you?
Even if it’s not exactly what you need for your business, it acts as a blueprint from which you can create a customized contract.
What Should an Equipment Sales Contract Include?
If you’ve offered equipment rental for a while, you probably already have some idea of what should go into your equipment sales agreement template. However, since you’re not booking rentals temporarily but instead turning over equipment ownership outright, there will be a few differences. A standard sales contract should include:
- Names and contact information for all involved parties
- Description of the equipment
- Payment terms
- Delivery terms
- Warranties and guarantees
While you might choose to include additional information or terms, either as part of your regular contract or for individual sales, these elements are the basics that will serve to protect you in the event of a dispute after the fact.
Names and Contact Information for All Involved Parties
The legitimacy of contracts can turn on a misspelled name, so it’s really important to make sure you nail down the correct names and contact information for all parties involved in your equipment purchase agreement.
Description of the Equipment
A major part of equipment sales management is making sure everyone knows exactly what pieces are being purchased. A generic equipment name such as “ventilator,” “excavator,” or “jet ski” won’t do the trick. What information do you need to include in the equipment description portion of your contract?
Naturally, a basic equipment purchase agreement template won’t include the specifics, so for each individual sales contract, so prepare to fill in details like:
- Model name and/or number
- Serial number
- Visual description of the equipment
You might also include the condition of the equipment at the time of sale. This wording could include terms like “new,” “used,” “as is,” “excellent,” “good,” “fair,” or “poor.” If there are known issues, you may want to spell them out, so everyone is aware of what they’re agreeing to. This approach could help to prevent disputes and legal action later on.
Before you jump right into scheduling delivery, you need to make sure the payment terms are understood by the purchaser. Payment terms are relatively simple to add to a contract. Include the total amount to be paid for the purchase, as well as acceptable forms of payment and the due date.
If you offer payment plans, you will have to stipulate them, as well as any penalties for late or missed payments. Don’t forget to include that the buyer is also responsible for sales tax or other taxes associated with the sale.
Need help nailing down your equipment pricing? Here’s a handy guide on rental equipment values.
Whether you offer delivery as part of the purchase price or you charge extra for this service, it’s best to include your terms as part of the equipment purchase agreement so the buyer knows what to expect.
In some cases, you may expect the buyer to arrange for pick-up from a storage location. You can make any arrangements you like where equipment delivery is concerned. Just make sure the buyer is aware and agrees to your terms.
Warranties and Guarantees
Any time someone purchases an expensive piece of equipment, whether it’s for business or personal use, they’re going to want some kind of guarantee that it’s not going to fall apart or fail immediately. They’ll also want to make sure they’re not buying something that “fell off a truck.”
The average equipment sales contract template should include some standard language to the effect that you are the rightful owner of the equipment and that when it is delivered to the buyer, legal ownership will be transferred.
It should also stipulate that the buyer agrees to take the equipment in its current condition and that the buyer indemnifies you against damages that may occur later.
If the equipment includes any transferrable manufacturer warranties or if you offer a warranty through your business, you should also include the information in the agreement.Download SAMPLE PURCHASE AGREEMENT TEMPLATE
The Value of Equipment Purchase Agreements
Equipment purchase agreements are an important part of any business operation that sells new or used equipment. With careful planning and attention to detail, these documents help to protect both your company and your clients.Learn About Quipli’s rental Software