Commercial Vehicle Master Lease Agreement
Agreement made on the _________________ (date) , between ___________________
(Name of Lessor) , a corporation organized and existing under the laws of the state of
______________, with its principal office located at ___________________________________
_______________________________________ (street address, city, county, state, zip
code) , referred to herein as Lessor , and __________________ (Name of Lessee) , a
corporation organized and existing under the laws of the state of ______________, with its
principal office located at ________________________________________________________
______________ (street address, city, county, state, zip code) , referred to herein as
Lessee.
1. Lease of Vehicles
Lessor agrees to Lease to Lessee , and Lessee agrees to hire from Lessor , the motor
vehicles specified, and the models described, in Schedule A attached hereto and made a part
hereof. The standard and extra equipment, if any, are also describe in said Schedule. The rent
due in each month on each vehicle is set for in Schedule B attached hereto and made a part
hereof. When used in this Agreement, the term vehicle shall mean a motor vehicle Leased
under this Agreement with all such equipment. Any additions to or deletions from Schedules A
or B when agreed to by both parties, and any agreed variation in models or types of vehicles,
shall be evidenced by a written amendment to this Agreement. Substitutions of a vehicle or
related equipment for any other vehicle or equipment, or an addition of equipment will be
evidenced by a new or additional delivery receipt amending the previous receipt. This
Agreement shall constitute the master Lease and shall be deemed to comprise as many
individual Leases as there are vehicles that may be delivered by Lessor to Lessee under
original individual delivery receipts, or amendments to the same.
2. Security Deposit
In addition to the rental, Lessee has this day deposited with Lessor a security deposit for
each vehicle in the amount specified in Schedule ______ (letter or number of schedule) . The
deposit shall be held by Lessor as security for the full and faithful performance by Lessee of all
the terms, conditions, and provisions of this Agreement. The existence of this deposit does not
in any way limit or waive any other rights or remedies of Lessor .
3. Ownership of Vehicles
This is an Agreement of Lease only and may not be construed as a contract for the sale of
vehicles. Lessee acknowledges that Lessor is the owner of all vehicles Leased under this
Agreement. Lessee further agrees that it does not acquire any legal or equitable interest in the
Leased vehicles but shall merely have the possessory right to use and operate the vehicles,
which possessory right shall be forfeited upon the termination or expiration of this Lease
Agreement as provided below, the terms and conditions of any sub-rental or subleasing
Agreement (whether or not authorized by this Agreement) to the contrary notwithstanding.
4. Payment of Rent
Lessor will invoice Lessee monthly for the amount of fixed rental payments, which shall
be payable monthly in advance. All rent payments shall be made at such place or places as
Lessor may designate and are due and payable on or before the _____ (number) day of the
month without deduction, setoff or counterclaim. The rent period for each vehicle shall
commence upon the day of delivery of such vehicle and shall terminate on the day when such
vehicle is returned to Lessor . Lessor reserves the right to revise rental rates to reflect any price
or specification changes made by the manufacturer for vehicles, accessories, and optional
equipment that are placed in service after such charge.
5. Late Payment Charge
If Lessee shall be in arrears in its rental payments under this Agreement, Lessor may
charge, and Lessee agrees to pay, in addition to the rental payments then due, a late payment
charge of ______% per month of the amount in arrears. This late payment charge is in addition
to and not in limitation of any other rights and remedies of Lessor . However, if Lessee shall
remain in default for ______ (number) days after notice of default, Lessor shall have the option
to cancel this Agreement and retake the vehicle(s) wherever the vehicle(s) may be found and
Lessor shall not be liable to Lessee for any acts or omissions incident to a repossession after a
default.
6. Term
The term of this Agreement shall be ______________ (date) , which is the day delivery
of the vehicles commences and will end on _______________ (date) . Lessee may, with
Lessor 's approval, extend the Lease term of any or all vehicles on a month to month basis at the
quoted rates by giving Lessor written notice of such election at least _____ (number) days in
advance of the expiration of the basic term, which notice shall include the serial numbers, and
location of the vehicle to be extended. Lessor may similarly extend the term of the vehicles up to
the maximum of ______ (number) months, but Lessee 's approval shall not be required. After
notice of Lessee 's intention to extend this Agreement, Lessor shall have the immediate right to
conduct an inspection of the vehicle at a time and place that Lessor selects. Lessee 's failure to
surrender the vehicle for inspection under this section, prior to extending the original Lease,
shall give Lessor the option to cancel this Agreement and retake the Leased vehicle(s)
immediately. If a vehicle is stolen or disappears, Lessee shall immediately notify the appropriate
local authorities and Lessor at Lessor 's home office. If a vehicle is stolen or disappears, or is
destroyed or so damaged that it cannot economically be placed in good working order, the
Lease shall terminate with respect to such vehicle, and the resulting expense, shall be borne as
elsewhere provided in this Agreement. Lessor shall have the right to verify such damage at its
option.
7. Substitution of Vehicles
Lessor shall have the right to substitute for any vehicle under Lease a vehicle of
comparable type and condition. In the event of any substitution of vehicles, the term shall be
computed from the date of delivery of the original vehicle and not from the date of delivery of
any substitute vehicles. Lessor may substitute optional equipment and body styles with
comparable options if the requested equipment or options is unavailable, for which Lessor shall
not be liable.
8. State, County, and City Registration and Licenses
Lessee shall accomplish the titling, registration, and licensing in the continental United
States of vehicles in Lessor 's name, provided that the title or certificate of registration to all
vehicles shall clearly indicate that Lessor is both the legal and registered owner of the vehicles
and Lessee shall promptly forward such title or certificate of registration to Lessor . Lessor shall
reimburse Lessee for the costs of registration and licensing of the vehicles. Lessee shall also
accomplish and pay for any inspections of Leased vehicles required during the terms of this
Agreement by any governmental authority. Lessee agrees to notify Lessor at least ______
(number) days before removing the vehicle(s) from the state of original registration. Lessee 's
failure to give proper notice under this section shall give Lessor the immediate right to cancel
this Agreement and retake the vehicle(s) wherever found at Lessee 's expense.
9. Taxes
Lessee shall pay and bear all federal, state, and local sales, use, excise, personal
property, and other taxes and all governmental assessments, fees, and charges imposed on or
in connection with any vehicle, or on the Lease, use, ownership, or possession of the vehicle
pursuant to this Agreement. Lessee shall file any necessary tax returns and shall furnish
adequate proof of payment to Lessor . If it is necessary for Lessor to pay any such taxes,
assessments, fees, or charges, Lessee shall reimburse Lessor for the same plus any charges
for delinquency.
10. Repair and Maintenance
A. Lessor 's Obligations.
1. Lessor shall keep and maintain each Leased vehicle in good operating
condition and working order, and shall make all necessary repairs and
replacements to such vehicles to the extent of $___________ (dollar amount of
limit of repairs and replacements) per year. Repairs shall include, but not be
limited to, tires, oil, lubricants, and antifreeze required for the proper operation
and protection of each vehicle. The cost of repairs and replacements in excess of
$____________ (dollar amount of limit of repairs and replacements) per year
will be borne by Lessee .
2. All repairs and service on each vehicle shall be performed at Lessor 's
garage. Lessee agrees that it will neither cause nor permit its employees to make
any repairs or adjustments except for repairs of flat tires and other minor
emergency work.
3. Lessee agrees to provide all gasoline required by each vehicle and to
maintain all oils and lubricants at the proper level. Lessee further agrees to keep
each vehicle properly garaged, stored, and washed. Lessor , its agents, servants,
and employees, shall have the right to inspect the vehicles at any reasonable
time and place.
4. Lessor shall not be liable to provide transportation for Lessee during the
time a vehicle Leased under this Agreement is undergoing maintenance or
repairs unless an appointment has been made for a substitute vehicle and the
substitute vehicle is available. If a substitute vehicle is unavailable, Lessor shall
not be held liable in any way or manner.
5. The manufacturer's standard warranty on new motor vehicles shall apply
to each vehicle, and a copy of the warranty shall be furnished with each vehicle.
Lessor and Lessee both agree to cooperate fully to insure that the maximum
permissible amount of repairs and adjustments to each vehicle are covered by
the warranty.
B. Lessee 's Obligations.
1. Lessee shall keep and maintain each vehicle in good operating condition
and working order, and shall make all necessary repairs and replacements to
such vehicle. All replacement parts and accessories, including batteries but
excluding minor parts such as spark plugs and oil filters regularly scheduled for
replacement, must be genuine manufacturer's parts. Title to all replacement parts
shall vest in Lessor . Lessee shall provide all gasoline, oil, and antifreeze required
for the proper operation and protection of each vehicle.
2. Lessee shall carry out the servicing and maintenance of the vehicle in
accordance with the manufacturer's suggested maintenance program, and shall
comply with Lessor 's and manufacturer's requirements respecting the nature and
location of service garages at which warranty work and service are to be done.
Authorized direct dealers of the manufacturer of the car line involved shall be
automatically deemed to be within these requirements. Lessor shall not be
obligated to pay for any washing, parking, garage, highway, or other fees, tolls or
liens of any nature that may be incurred in connection with the operation of each
vehicle.
3. Lessee shall be liable for all fines, parking violations, and any fines
imposed by any governmental authority upon the automobile or driver during the
Lease term which shall be paid by Lessee . Lessee shall hold Lessor harmless
from any and all fines, penalties, and forfeitures imposed on account of the
operation of the automobile in violation of any law or ordinance, together with
expenses incurred by Lessor in connection with the same. Upon failure by
Lessee to pay any fine or parking violation in accordance with _______________
(citation of state statute) or penalty of forfeiture assessed on a Leased vehicle
during the term of the Lease, Lessor shall have the right to deduct such amount
to satisfy such fine or penalty from Lessee 's security deposit.
11. Insurance
A. Insurance shall be procured and maintained for the term of the Lease for each
vehicle in insurance companies satisfactory to Lessor and Lessee . Policies are to
include the interest of both Lessor and Lessee and will provide limits of:
1. $ ____________ per person for bodily injury;
2. $ ____________ per accident for bodily injury;
3. $ ____________ property damage;
4. $ ____________ deductible collision; and
5. $ ____________ deductible fire and theft (comprehensive).
B. Lessee shall pay any deductible and any amounts not covered by insurance
payments.
C. Lessor , Lessee , their employees, and their agents shall comply with all terms and
conditions of the insurance policies. All claims (including claims for bodily injury, property
damage, or vehicle damages) are to be reported immediately to both Lessor and the
insurance company under this Section and Section Fifteen, Paragraph C of this
Agreement.
D. If Lessor provides insurance, Lessee 's monthly rental payment is subject to
escalation annually to reflect changes in the cost of the insurance to Lessor . If such
charges increase, Lessee has the option to provide the insurance. If Lessor 's insurance
policy is cancelled or insurer deems the Leased vehicle to be exposed to extraordinary
risk, Lessee may be required to provide insurance and appropriate adjustment will be
made in the monthly rental charge.
E. If Lessee provides insurance, a certificate of insurance with a ______ (number ) -
day cancellation notice will be required prior to delivery of the vehicle.
12. Return of Leased Vehicles
Upon the expiration or termination of the Lease for any cause with respect to any vehicle
or upon substitution of any vehicle, that vehicle shall be returned immediately and without delay
to Lessor at Lessee 's expense at a place designated by Lessor . Except as specified below in
this Agreement with regard to the appearance of the vehicle, Lessee shall return the vehicle in
as good condition and order as when received by Lessee , ordinary wear and tear and damage
or defects, which are specifically covered by manufacturer's warranty, and natural depreciation,
excepted. If upon expiration or termination of this Lease for any cause or for any reason, the
Leased vehicle or substitution vehicle is returned in an unsatisfactory condition after inspection
by Lessor , excepting ordinary wear and tear and natural depreciation, Lessee shall pay, as
additional rent, Lessor 's cost of cleaning, repairing, or replacing any damage to vehicle(s)
occasioned by:
A. Improper, negligent, abusive, or reckless treatment in the care and operation of
the vehicle(s);
B. Traffic accidents;
C. Operation and maintenance without proper oil, water, or other necessary
lubricants or items; or
D. Towing, pushing, plowing, or illegal uses, none of which shall be considered
ordinary wear and tear or natural depreciation.
Lessor reserves the right to apply any or all of the security deposit to reimburse Lessor 's cost for
cleaning, repairing, or reconditioning under this provision. Lessee shall give Lessor _______
(number) days advance written notice by certified mail of serial numbers and location of
vehicles to be taken off Lease. Each vehicle shall be in good operating condition and will have
all original equipment and five safe tires each with at least ___________ (fraction of an inch)
remaining measurable tread of the original supplied type.
13. Indemnification
Lessee shall defend, indemnify, and hold harmless Lessor , its parent, subsidiary and
affiliated companies and its and their officers and employees, from and against any and all
damages, loss, theft, or destruction of any vehicle and against all losses, liabilities, damages,
injuries, claims, demands, costs, and expenses of every kind and nature, including legal fees
and disbursements arising out of and in connection with the use, condition, or operation of
vehicles during the Lease term. Lessee agrees to pay any and all costs of repossession
together with reasonable attorney's fees and costs that grow out of any suit or suits commenced
by Lessor under this provision.
14. Lessee ’s Damages
Lessor shall not be responsible to Lessee , or its agents, servants, or employees, for loss
of business or other damage caused by any interruption of the service to be furnished under this
Agreement by Lessor , or by time lost in the repairing or replacing of any vehicles, nor for any
loss, injury, or damage arising out of or relating to Lessor 's failure to deliver vehicles pursuant to
this Agreement by reason of strikes or other causes beyond control of Lessor nor for any other
losses or damages sustained by Lessee under this Agreement except as specifically provided in
Lessor 's undertakings in this Agreement. Lessor assumes no liability or responsibility for any
acts or omissions of Lessee or of Lessee 's agents, servants, or employees, or for any property
of Lessee , its agents, servants, or employees or any other persons, including property that is
damaged, lost, or stolen in or from the vehicles.
15. Operation of Vehicles
A. Lessee shall permit only licensed drivers to operate the vehicles, and shall
require them to operate the vehicles with reasonable care and diligence and to comply
with standard written instructions furnished by Lessor covering the operation and
maintenance of the vehicles. Lessee shall also obtain license number, state of issuance,
and residence shown from each licensed driver, and this information shall be maintained
as a part of Lessee 's regular business records.
B. Lessee shall not permit any vehicle to be used in violation of any federal, state,
or municipal statutes, laws, ordinances, rules, or regulations, or contrary to the provision
of any applicable insurance policy, and Lessee shall indemnify and hold Lessor
harmless from any and all fines, forfeitures, damages, or penalties resulting from
violation of such laws, ordinances, rules, regulations, or any of them. Lessor shall
forward to Lessee any notices received by Lessor of fines or other penalties levied in
connection with the use of Leased vehicles, and may pay such fines if Lessee does not
do so within ______ (number) days of the date of Lessor 's notice and may bill Lessee
for the same immediately, including an appropriate handling fee, or add such amount to
the next rental billing or apply to the payment of such fine any money of Lessee which
may come into its possession or reduce the amount of the security deposit by the
amount of the fine.
C. Lessee shall notify Lessor immediately of any and all accidents involving a
vehicle Leased under this Agreement. Such notice shall be by telephone and in writing
and shall include full details of the accident and the names and addresses of all parties
and witnesses. Lessee shall keep Lessor and the insurer fully informed of all claims,
suits, or proceedings arising out of any accident involving a Leased vehicle. Lessee shall
forward to insurer and Lessor a copy of every demand, notice, summons, or other
process received in connection with any and all claims, suits, or other legal proceedings
resulting from an accident involving a vehicle Leased under this Agreement.
D. Upon written notice from Lessor , Lessee shall immediately remove, prevent, and
not allow any driver designated in such notice to operate or drive any Leased vehicle.
E. Except with the written consent of Lessor , the use of all vehicles shall be limited
to the continental limits of the United States and Canada.
F. Lessee agrees to hold the driver of the Leased vehicle liable for any damage
caused by the driver in breach of the condition of this Agreement or liable for any willful
damage to the vehicle, or for any damage due to carelessness or negligence of the
driver, the payment of which damages Lessee guarantees to Lessor .
G. Lessee agrees not to overload the vehicle.
H. Lessor may inspect, adjust, or repair any vehicle, upon Lessee 's premises or
elsewhere at any and all reasonable times, and Lessee shall cooperate fully to facilitate
such inspections, adjustments, and repairs.
I. Lessee agrees not to assign this Agreement or sublease any Leased vehicle.
Lessee shall not permit any automobile Leased under this Agreement to be used for hire
or as a common carrier.
J. In no event shall any vehicle Leased under this Agreement be operated by any
person under the influence of alcohol or narcotics. Lessor shall have the right to cancel
this Agreement with reference to any vehicle so operated and to demand that the person
so operating the vehicle be forbidden to drive any vehicle Leased under this Agreement.
16. Default and Termination by Lessee
A. If Lessee fails to pay in full on the due date any payment due under this
Agreement, or defaults in the performance of any of the terms, conditions, or covenants
contained in this Agreement, or in the event of Lessee 's bankruptcy or insolvency, upon
______ (number) days written notice to Lessee , Lessor shall have the right to take
immediate possession of the vehicle wherever found with or without process of law, and
to terminate the Lease with respect to such vehicle. Lessee authorizes Lessor and its
agents to enter on any premises where the vehicle may be found for the purpose of
repossessing the vehicle, and waives any further interest in the vehicle and any right of
action arising out of such entry and repossession. Lessor shall not be liable in damages
for any termination pursuant to this paragraph and no termination of this Agreement by
Lessor or repossession of any vehicle shall in any way relieve Lessee of liability for any
sum or sums due or to become due Lessor under this Agreement, or for any damages
which Lessor shall have sustained as a result of any default by Lessee , including but not
limited to the cost of repossession. If suit is instituted by Lessor to enforce any of the
terms or provisions of this Agreement, Lessee agrees to pay Lessor reasonable
attorney's fees incurred in such suit or suits. If Lessee has defaulted or breached the
terms or conditions of this Agreement, Lessee shall pay to Lessor in addition to any
accrued unpaid rent, as liquidated damages for breach of this Agreement, the amount of
the rental required to have been paid by Lessee for the unexpired balance of the term of
this Agreement. The mention in this Agreement of any particular remedy shall not
preclude Lessor from any other remedy at law or equity, nor shall the exercise of one
remedy preclude the exercise of another.
B. Any termination of this Lease Agreement is made subject to the provisions of
Sections 12 and 16 of this Agreement. Upon termination by Lessee , Lessee shall pay to
Lessor a termination charge determined by re-computation of the Lease rate considering
the reduced term of the Agreement and based on the wholesale market value of the
vehicle at the date of termination, surrender, or return.
C. If any vehicle is lost, stolen, or disappears, or is destroyed or so damaged that, in
Lessor 's judgment, it cannot be economically placed in good working order, then the
Lease shall terminate with respect to that vehicle. Such a termination shall be effective
________ (number) days from the date of notice by Lessee of loss, theft, or damage. If
a vehicle is lost, stolen, or so damaged or disappears or is destroyed, under this section,
Lessee is not relieved of the obligation to pay under this Agreement and the termination
shall be treated as a termination by Lessee and is subject to Paragraphs A and B of this
Section 16, as to termination charges. In addition, Lessee agrees to pay the present
monthly installment, then due, if the loss or damage occurs on or after the installment
due date and any and all monies then due Lessor . Lessor reserves the option to offer a
replacement or substitute vehicle, which vehicle(s) shall be subject to the terms of this
Agreement, or Lessor and Lessee may execute a new Lease Agreement. If Lessor
exercises its option to provide a replacement or substitute vehicle, Lessee agrees to pay
Lessor any additional rental costs that exceed the original Lease rental costs, if there are
any, for the substituted or replacement vehicle.
D. Notwithstanding anything in this Agreement to the contrary, this Lease
Agreement terminates automatically and without notice, with respect to all vehicles,
upon: (1) an attempted assignment by Lessee of this Lease Agreement; (2) an
assignment by Lessee for the benefit of creditors; or (3) the institution of voluntary or
involuntary proceedings by Lessee in bankruptcy or under insolvency laws or for
corporate reorganization, arrangement, receivership, or dissolution. Upon any such
event, Lessor shall then be entitled to take immediate possession of all vehicles and
may have such further relief to which it is entitled under any of the provisions of this
Agreement in addition to any and all rights in law or in equity.
E. If upon the termination, cancellation, or breach of this Agreement, Lessee fails or
refuses to return the Leased vehicle(s) to Lessor , upon demand by Lessor , the failure or
refusal to return the Leased vehicle(s) may be considered as a conversion and treated
as a theft of the vehicle(s) and Lessor shall have the right to notify and request the police
authorities to recover same as a stolen vehicle.
17. Early Termination by Lessee
Lessee shall have the election to terminate this Agreement by notifying Lessor , at any
time after making _______ (number) monthly rental payments under this Agreement, of ______
(his/her) its intention to terminate upon ______ (number) days prior written notice (certified
mail, return receipt requested) to Lessor ; provided that at least _____ (number) days before the
proposed termination date, Lessee delivers the vehicle to Lessor for its inspection (subject to
the provisions of Sections 12 and 16 on surrender and termination charges). Lessee agrees to
be liable for termination charges under Section 16, Paragraph B in addition to all of the
following:
A. All rent due Lessor to the proposed termination date or to the date Lessee
delivers or returns the Leased vehicle(s) to Lessor , whichever is later.
B. Mileage on the Leased vehicle as pro-rated in accordance with the mileage
allowance specified in the attached Schedule C. All payments due Lessor under this
paragraph shall be paid by Lessee at such time as the vehicle is returned, delivered, or
surrendered to Lessor . Lessee shall not be deemed to have exercised early termination
until all requirements of this paragraph have been fully satisfied.
C. Any and all costs of cleaning, repairing, and reconditioning, due to causes other
than ordinary wear and tear or natural depreciation, or due to abusive use or operation
of the vehicle(s) (also subject to provisions of Sections 12 and 16 concerning surrender.
18. Severability
The invalidity of any portion of this Agreement will not and shall not be deemed to affect
the validity of any other provision. If any provision of this Agreement is held to be invalid, the
parties agree that the remaining provisions shall be deemed to be in full force and effect as if
they had been executed by both parties subsequent to the expungement of the invalid provision.
19. No Waiver
The failure of either party to this Agreement to insist upon the performance of any of the
terms and conditions of this Agreement, or the waiver of any breach of any of the terms and
conditions of this Agreement, shall not be construed as subsequently waiving any such terms
and conditions, but the same shall continue and remain in full force and effect as if no such
forbearance or waiver had occurred.
20. Governing Law
This Agreement shall be governed by, construed, and enforced in accordance with the
laws of the State of ______________.
21. Notices
Any notice provided for or concerning this Agreement shall be in writing and shall be
deemed sufficiently given when sent by certified or registered mail if sent to the respective
address of each party as set forth at the beginning of this Agreement.
22. Attorney’s Fees
In the event that any lawsuit is filed in relation to this Agreement, the unsuccessful party
in the action shall pay to the successful party, in addition to all the sums that either party may be
called on to pay, a reasonable sum for the successful party's attorney fees.
23. Mandatory Arbitration
Any dispute under this Agreement shall be required to be resolved by binding arbitration
of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one
arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall
arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration
Association then in force and effect.
24. Entire Agreement
This Agreement shall constitute the entire agreement between the parties and any prior
understanding or representation of any kind preceding the date of this Agreement shall not be
binding upon either party except to the extent incorporated in this Agreement.
25. Modification of Agreement
Any modification of this Agreement or additional obligation assumed by either party in
connection with this Agreement shall be binding only if placed in writing and signed by each
party or an authorized representative of each party.
26. Assignment of Rights
The rights of each party under this Agreement are personal to that party and may not be
assigned or transferred to any other person, firm, corporation, or other entity without the prior,
express, and written consent of the other party.
27. In this Agreement, any reference to a party includes that party's heirs, executors,
administrators, successors and assigns, singular includes plural and masculine includes
feminine.
WITNESS our signatures as of the day and date first above stated.
__________________________ ________________________
(Name of Lessor) (Name of Lessee)
By:______________________________ By:_____________________________
__________________________ ___________________________
(P rinted name & Office in Corporation) (P rinted name & Office in Corporation
__________________________ ___________________________
(Signature of Officer) (Signature of Officer)
