Is an electronic signature valid?

Yes. Under the ESIGN Act (15 U.S.C. ch. 96) and UETA, electronic signatures are legally binding when intent, consent, attribution, and record retention requirements are met.

When is notarization required?

Notarization depends on state law and the nature of the transaction; certain states and transaction types may require a notarized acknowledgment for enforceability or recordation.

Can I use remote notarization?

Many states permit Remote Online Notarization (RON) with identity proofing and audio-video recording; confirm your state’s notary rules before relying on RON.

What if parties use different names?

Ensure the legal name used matches IDs or formation documents; mismatched names can create enforceability and notice issues and may require an affidavit to correct.

How should I store the executed agreement?

Store as a PDF/A with the complete audit trail and any exhibits; retain per applicable retention rules such as IRS or HIPAA timelines when relevant.

Who is responsible for damage during the loan?

Liability depends on contract language: specify whether the borrower assumes strict liability, is responsible only for negligence, or must carry insurance to cover loss or damage.

Electronic Signature
Templates
Legal
Legal Commodate Agreement

Legal Commodate Agreement

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LEGAL COMMODATE AGREEMENT

This Commodate Agreement (the "Agreement") is made effective as of by and between Lender: , an entity that is Individual Corporation LLC Other, with principal address at ; and Borrower: , an entity that is Individual Corporation LLC Other, with principal address at .

RECITALS

WHEREAS, Lender is the lawful owner of certain personal property described as:

WHEREAS, Lender is willing to loan the described property to Borrower gratuitously for Borrower's limited use under the terms and conditions set forth herein; and

WHEREAS, Borrower desires to accept possession of the described property on the terms and conditions set forth in this Agreement and covenants to return the property in accordance with this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties agree as follows:

1. DEFINITIONS

(a) "Property" means the personal property identified in the property description above and any component parts, accessories, replacements and substitutions provided by Lender.

(b) "Term" means the period commencing on the Effective Date and continuing until the earlier of return of the Property to Lender or termination under Section 10. The anticipated return or termination date:

2. GRANT OF COMMODATE

Lender hereby delivers possession of the Property to Borrower on a gratuitous loan-for-use basis. Borrower accepts possession solely for the Permitted Use described in Section 3. Title to the Property remains and shall remain vested in Lender at all times.

3. TERM; DELIVERY; PERMITTED USE

3.1 Delivery. Lender shall deliver the Property to Borrower at the following location: on or about , subject to acceptance by Borrower.

3.2 Permitted Use. Borrower shall use the Property solely for the following purpose(s): . Any use beyond the Permitted Use is a material breach.

4. CARE, MAINTENANCE AND ALTERATIONS

Borrower shall, at Borrower's sole cost and expense, maintain the Property in good condition and repair reasonable wear and tear excepted. Borrower shall not modify, alter, or affix any attachments to the Property without Lender's prior written consent. Should any repair be required beyond ordinary maintenance, Borrower shall promptly notify Lender and obtain written authorization prior to undertaking such repair.

5. RISK OF LOSS; TITLE

Risk of loss, theft or damage to the Property shall pass to Borrower upon delivery. Borrower is responsible for loss or damage to the Property during the Term except for loss or damage resulting solely from Lender's gross negligence or willful misconduct. Title to the Property shall at all times remain with Lender and nothing in this Agreement shall be construed to create a security interest, lease, or conveyance of title.

6. INSURANCE

Borrower shall, at Borrower's expense, procure and maintain insurance covering the Property against loss, theft, and damage in amounts not less than: and name Lender as loss payee or additional insured where applicable. Borrower shall provide Lender with certificates of insurance upon request.

7. INDEMNITY

Borrower shall indemnify, defend and hold harmless Lender, its officers, directors and agents from and against any and all claims, liabilities, losses, damages, costs and expenses (including reasonable attorneys' fees) arising out of or related to Borrower's possession, use, maintenance, storage, transportation or return of the Property, except to the extent caused by Lender's gross negligence or willful misconduct.

8. INSPECTION; ACCESS

Lender shall have the right, upon reasonable prior notice, to inspect the Property at Borrower's premises during normal business hours. If Borrower fails to provide access, Lender may, after written notice and in accordance with applicable law, repossess the Property.

9. DEFAULT; REMEDIES

9.1 Events of Default. The occurrence of any of the following shall constitute an Event of Default: (a) Borrower's failure to perform any material obligation under this Agreement; (b) Borrower's insolvency, appointment of a receiver, or voluntary or involuntary bankruptcy proceedings by or against Borrower; or (c) Borrower's unauthorized sale, transfer or encumbrance of the Property.

9.2 Remedies. Upon Event of Default, Lender may, at Lender's option, terminate this Agreement and retake possession of the Property, seek damages or specific performance, and pursue any other remedies available at law or in equity. Borrower shall reimburse Lender for all costs of collection, repossession and reasonable attorneys' fees incurred in enforcing Lender's rights hereunder.

10. RETURN OF PROPERTY

Upon expiration or earlier termination of the Term, Borrower shall, at Borrower's expense, return the Property to Lender at the delivery location or such other location designated by Lender within calendar days, in the same condition as received, ordinary wear and tear excepted.

11. REPRESENTATIONS AND WARRANTIES

Each party represents and warrants that it has full power and authority to enter into this Agreement and to perform its obligations hereunder, and that the execution and delivery of this Agreement has been duly authorized.

12. NOTICES

Notices to Lender

Name / Attention Address Email / Phone

Notices to Borrower

Name / Attention Address Email / Phone

13. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to its conflict of law principles.

14. ENTIRE AGREEMENT; AMENDMENT; WAIVER; SEVERABILITY; COUNTERPARTS

14.1 Entire Agreement. This Agreement, including the property description and any schedules or attachments hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, whether written or oral.

14.2 Amendment; Waiver. No amendment, modification or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties. No failure or delay by a party in exercising any right shall constitute a waiver of that right.

14.3 Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable, the remaining provisions shall continue in full force and effect and the parties shall negotiate in good faith to replace the invalid provision with a valid provision that most closely effects the parties' original intent.

14.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures delivered by electronic means shall be enforceable and binding.

15. MISCELLANEOUS PROVISIONS

Borrower shall not assign or transfer its rights or obligations under this Agreement without Lender's prior written consent. Any attempted assignment without such consent shall be void. The parties agree to cooperate and execute any further documents necessary to carry out the intent of this Agreement.

Lender

Printed Name:

By:

Date:

Borrower

Printed Name:

By:

Date:

What the Legal Commodate Agreement Is and when it applies

A Legal Commodate Agreement (loan for use) is a written contract under which an owner (the lender) temporarily transfers possession of tangible property to another party (the borrower or bailee) without transferring title and normally without payment. The agreement sets the permitted use, required care, liabilities for loss or damage, the term for return, and any conditions for inspection or maintenance, creating enforceable duties and remedies if the borrower fails to return or properly care for the property.

Why a clear Commodate Agreement matters

A properly drafted Commodate Agreement reduces disputes by allocating responsibility for care, loss, insurance, and return timing, and it clarifies each party’s remedies and limit of liability.

Common users and scenarios for a Commodate Agreement

Use this agreement whenever one party loans physical property to another for temporary use without transferring ownership.

Equipment lenders: Companies loaning tools, machinery, or electronics for trials, repairs, or short-term projects.
Property managers: Landlords or managers lending furniture, appliances, or fixtures during tenant transitions.
Individuals: Private parties lending vehicles, specialized tools, or hobby equipment for personal use.

Tailor the document to the specific property, set clear return conditions, and include inspection and insurance requirements to limit exposure.

Who signs and what their roles are

Lender (Owner)

The natural person or legal entity that owns the property and grants temporary possession. The lender should identify the item clearly, state any pre-loan condition, and specify insurance or repair responsibilities to preserve remedies for loss or damage.

Borrower (Bailee)

The receiving party who accepts temporary possession and is responsible for reasonable care, permitted use limits, and timely return. The borrower must acknowledge receipt, agree to the stated obligations, and provide contact information for enforcement or notice.

Essential clauses to include in a professional Commodate Agreement

A concise Commodate Agreement should include clear definitions, property description, term and return conditions, insurance and liability allocation, permitted uses, and signatures with dates.

Property Description

Include make, model, serial numbers, identifying marks, and attachments such as photos or condition checklists to avoid later disputes about item identity or pre-existing damage.

Term and Return

Specify the start date, end date, any renewal rights, and the exact return location and condition expected to avoid ambiguity about late returns or open-ended loans.

Permitted Use

Define what the borrower may and may not do with the property, including geographic limits and prohibitions on resale, subloan, or modification without written consent.

Care and Maintenance

State the standard of care required, who performs routine maintenance, how repair costs are allocated, and procedures for reporting damage or loss.

Insurance and Liability

Identify required insurance coverage, whether the lender retains risk for latent defects, and any limits on the borrower’s liability or indemnification obligations.

Return & Remedies

Describe the process for return, inspection, consequences for failure to return, late fees, and remedies including repair, replacement, or statutory damages.

Required information and fields to collect

Lender Name: Full legal name

Borrower Name: Full legal name

Item Description: Make/model/serial

Loan Term: Start and end dates

Insurance Details: Policy and limits

Signature Block: Signatures and dates

Step-by-step: completing the Commodate Agreement

Follow these steps in order to prepare, verify, and execute the document so it is clear, enforceable, and ready for storage.

01

Prepare details: Describe the property and attach photos.
02

Set terms: Specify dates, permitted use, and return process.
03

Assign responsibilities: Define care, insurance, and repair duties.
04

Execute properly: Sign, date, and notarize if required.

How to configure an online Commodate Agreement workflow

Configure these fields when setting up the document in an eSignature platform to ensure correct routing, authentication, and storage.

Field	Configuration
Signer Order	Lender first, then borrower; allow counter-signing.
Authentication	Email plus optional SMS code or ID check.
Notary Option	Enable RON or in-person notarization where required.
Storage Format	Save as PDF/A with audit trail attached.

Typical routing and submission flow for this agreement

A standard digital workflow moves the document from preparation to signature and archival while capturing a complete audit trail for enforceability.

Upload Document: Create the agreement and attach exhibits or photos.
Place Fields: Add signature, date, and initial fields for each signer.
Authenticate Signers: Use email links, SMS codes, or ID proofing as needed.
Capture Audit Trail: Record timestamps, IPs, and actions for proof.

Digital signing and technical considerations

Use an eSignature platform that supports secure signatures, audit trails, and the authentication level required by your jurisdiction.

File formats: PDF and DOCX supported
Integrations: Connect to storage and CRM systems
Security: AES-256 at rest; TLS 1.2/1.3

Ensure the provider supports retention, optional RON notarization, and an exportable audit trail to preserve evidence of execution and consent.

Key timing items and common deadlines

Track these time-sensitive elements when using a Commodate Agreement so each party meets notice, inspection, and return obligations.

Possession Effective Date:

Date when borrower takes possession and obligations begin.

Inspection Window:

Period for lender to inspect item upon return.

Notice to Terminate:

Any required advance notice to end open-ended loans.

Return Deadline:

Exact date/time for returning the property.

Record Retention:

Keep executed agreement for statutory retention period.

Common risks and penalties for incorrect or incomplete agreements

Property Loss: Borrower may be liable

Damage Claims: Repair or replacement costs

Insurance Gaps: Potential uninsured exposure

Late Return Fees: Per-agreement or statutory remedies

Enforceability Issues: Vague terms can invalidate claims

Regulatory Violations: Industry rules may apply

Real examples: how organizations use Commodate Agreements

These case examples illustrate practical uses in business contexts and the outcomes when agreements are clear and well-executed.

Optica Ventures — Equipment Trials

Optica provided test cameras to a client under a written Commodate Agreement to control liability and condition.

The agreement required photos on delivery.
The checklist and signed condition report eliminated a later dispute and allowed quick recovery when minor damage occurred, preserving business relationships.

Martin Properties — Furnished Loan

A property manager lent appliances to a short-term tenant under a Commodate Agreement that specified permitted use.

The tenant agreed to insurance naming the manager as additional insured.
Clear insurance and return conditions avoided coverage gaps and streamlined repair cost allocation after normal wear was identified.

Practical tips for accurate and efficient completion

Apply these practices to reduce later disputes, accelerate processing, and maintain clear evidence of the parties’ agreement.

Identify items precisely and attach photos

Use serial numbers and attach dated photos or condition checklists to the agreement to prevent later disputes about pre-existing damage or missing components.

Specify permitted use and geographic limits

Clear usage limits and a prohibition on subloans or resale reduce the risk of misuse and help courts interpret the parties’ intent.

Require insurance or indemnity where appropriate

For high-value items, require named insured coverage or a written indemnity to allocate the financial burden of loss or damage clearly.

Use eSign with strong authentication

Electronic signatures with an attached audit trail, and optional SMS or ID verification, improve speed and provide admissible execution evidence under ESIGN/UETA.

eSignature vendor comparison for executing Commodate Agreements

Compare common capability and pricing points for eSignature platforms when selecting a provider for secure execution and storage of the agreement. Pricing and features vary by plan.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes	Yes	Yes	Yes	Varies
Audit Trail	Yes	Yes	Yes	Yes	Yes
Envelope Cap	No cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Frequently asked questions and common issues

Answers to practical questions about enforceability, signatures, notarization, and common pitfalls when using a Commodate Agreement.

Need help? Contact support

Is an electronic signature valid?
Yes. Under the ESIGN Act (15 U.S.C. ch. 96) and UETA, electronic signatures are legally binding when intent, consent, attribution, and record retention requirements are met.
When is notarization required?
Notarization depends on state law and the nature of the transaction; certain states and transaction types may require a notarized acknowledgment for enforceability or recordation.
Can I use remote notarization?
Many states permit Remote Online Notarization (RON) with identity proofing and audio-video recording; confirm your state’s notary rules before relying on RON.
What if parties use different names?
Ensure the legal name used matches IDs or formation documents; mismatched names can create enforceability and notice issues and may require an affidavit to correct.
How should I store the executed agreement?
Store as a PDF/A with the complete audit trail and any exhibits; retain per applicable retention rules such as IRS or HIPAA timelines when relevant.
Who is responsible for damage during the loan?
Liability depends on contract language: specify whether the borrower assumes strict liability, is responsible only for negligence, or must carry insurance to cover loss or damage.

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