Vehicle Hire Agreement Template UK (A226)

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Who can use this Vehicle Hire Agreement?

Anyone who wants to hire out a car, lorry or other vehicle to a business can use this vehicle hire agreement.

What is this vehicle hire agreement for?

You need certainty when hiring a vehicle – whether you are the owner or the hirer.   This vehicle hire agreement sets out the rules.

Please note it is not suitable for hiring to consumers as it is not written with consumer credit legislation in mind.

For an agreement to hire other equipment, see our document A145

What are the main issues?

These are fairly straightforward and include:

  • The basic details of the transaction – the vehicle, length of hire, charges and payment terms. This will be set out in a schedule
  • the hirer’s general duties and responsibilities, which include some prohibitions – e.g. using it for racing or tuition of a learner driver
  • the owner’s general obligations which are fairly limited and include replacing the vehicle if it breaks down through no fault of the hirer
  • insurance and indemnity – usually the owner arranges insurance and the hirer gives an indemnity for certain losses and expenses he incurs including parking penalties and speeding fines

What detailed  terms does the contract contain?

This agreement contains 10 clauses covering

  • definitions
  • hire agreement
  • delivery of vehicle
  • hirer’s general obligations
  • owner’s general obligations
  • hire charges and payment
  • insurance and indemnity
  • termination
  • assignment
  • governing law and disputes

For more information on each of these sections, see our Explanatory Notes below which you will also receive when you download the document from our website.

For information on signing documents see our Contract Signing page

When I download the document, can I change it and/or use it more than once?

Yes, all ContractStore’s templates are in MS Word and you can use the contract on more than one project. For more information, watch the video on this page of our website or see our FAQs

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Explanatory Notes

This hire agreement is intended for use where one party, the Owner, hires out a vehicle to another party, the Hirer. It can be used for renting a car, van or other road-going vehicle.

The agreement is reasonably straightforward and contains details of the Vehicle, the Hire Charge and the Hire Period in a Schedule, which should be completed and attached to the agreement when it is signed.

In the UK many hire agreements, when the hirer is an individual, are covered by the Consumer Credit Act. This Agreement is not written subject to the Consumer Credit Act and is intended for commercial hiring and not when consumers are involved.

Specific comments on the model form are set our below:

DATE

This is the date when the agreement is signed by both parties. It is not necessarily the date upon which the Hire Period starts.

PARTIES

Here set out the full name of each party and the official address of those parties when they have one – e.g. the registered office in the case of a limited company incorporated in England.

1. DEFINITIONS

We have inserted definitions of the Vehicle, the Hire Period and Hire Charges. When filling in the Schedule, care should be taken to include all relevant details. For example, in the case of the Vehicle, it is recommended that you include the chassis and engine no. as well as make, model and registration number.

2. HIRE AGREEMENT

This clause sets out the basic agreement between the parties – namely that the Hirer will rent the Vehicle for the specified Hire Period.

Clause 2.2 contains provision for the Hire Period to be extended by agreement. It is certainly recommended that any extension is agreed in writing before the initial period (or any extended period) expires.

3. DELIVERY OF VEHICLE

This refers to the place where the vehicle will be delivered.

4. HIRER’S GENERAL OBLIGATIONS

The general approach of the agreement and, in particular, of this clause, is that the Hirer is fully responsible for the Vehicle whilst it is in his possession.

The obligations include: ensuring that it is only driven by qualified drivers, maintaining the Vehicle in good condition, having it serviced regularly (which would only apply on a long-term agreement), not overloading the vehicle, not using it for driving tuition or sporting events etc. Also any loss or damage must be notified immediately by the Hirer.

5. OWNER’S GENERAL OBLIGATIONS

The obligations of the Owner are relatively limited. If the vehicle breaks down the Owner only has to provide a replacement vehicle if he has one that is suitable. If he does not, a rebate of the Hire Charge while the Vehicle is unusable would be appropriate if the problem is not the fault of the Hirer.

6. HIRE CHARGES AND PAYMENT

This sets out the basic payment terms – it is usual for Vehicle Hire Charges to be payable in advance – either for the entire period or for an initial period of one month, three months etc. Actual amounts will be inserted in the Schedule.

7. INSURANCE & INDEMNITY

The Owner is normally responsible for insurance of the vehicle and our clause deals with this. There is alternative wording for when the Hirer is to take out the insurance.

The Hirer is liable for paying any parking charges or speeding fines and he also indemnifies the Owner against various liabilities and risks. However, you should bear in mind that it may not always legally possible for an Owner to be exempt from liability if, for example, he supplies a defective Vehicle, which causes death or injury to an individual.

8. TERMINATION

The Owner is given the right to terminate and recover the vehicle if the Hirer becomes insolvent or commits any breach of the agreement.

9. ASSIGNMENT

An agreement to hire vehicle is essentially an agreement between two parties and it will not be appropriate for the Hirer to pass the Vehicle on to someone else – hence the restriction on assignment or subletting.

10. DISPUTES AND GOVERNING LAW

We have kept the wording of this Clause simple, so that it states the governing law and refers to the courts of that country. For more complex provisions relating to the resolution of disputes and governing law, see the free documents on our website.

SCHEDULE

As previously mentioned, the details in the Schedule need to be filled in with care so that the precise terms of the hiring are clear and unambiguous.

SIGNING

Each party signs the agreement. In the case of a company, a duly authorised individual, (usually a director) should sign.