Free wet hire agreement templates (Australia)

As an equipment and machinery owner, you understand how important it is to keep these items in the best shape possible. You can't hire out damaged goods. Your clients want functional equipment, but they may not be as knowledgeable on how to use, handle or operate it. This is why a wet hire agreement is useful. It lets you hire out your equipment together with the personnel to handle and operate it.

What is a wet hire agreement?

This is a legal document that sets out the terms for hiring out equipment, machinery or vehicles together with the personnel for handling them. These agreements are useful for companies offering specialist equipment for hire, such as audio visual equipment. The party hiring the equipment does not need to go looking for professionals to handle and operate the equipment as you will be supplying it, and everything will be laid out in one document.

When should I use a wet hire agreement?

You should use a wet hire agreement when you want to hire out your equipment to another business including the services it requires, but are concerned about its maintenance. This agreement is especially useful when hiring out electronic items, delicate machinery or equipment that requires skilled staff to operate. This agreement makes it possible for you to serve clients while safeguarding your assets from unnecessary damage.

Consider these examples. You own audio visual equipment that you want to hire out to an events company. This equipment has to remain in quality condition to serve its purpose. If you hire it out to a company that then looks for a third party to handle and operate it, you cannot guarantee this person will do it carefully and efficiently. But if you use a wet hire agreement, you rest assured that your equipment will be handled by your own trained staff.

Wet hire agreement vs dry hire agreement

Dry hire agreements set out the terms for hiring out equipment without operators. The company hiring out does not provide professionals to operate the equipment. Instead, the business hiring the equipment has to go out and look for third parties who are competent enough to operate the equipment.

For example, if you have an excavator, you can rent it out either as a product on its own (excavator only) or as a product plus service (excavator and operator). In the first case, you will use a dry hire agreement. In the second, you will use a wet hire agreement.

What does a wet hire agreement include?

A well-written wet hire agreement includes several key components. They include:

• Names of parties entering into the hire agreement
• Definition of terms
• A description of the equipment being rented out (includes details on its condition before hiring)
• Time period for hiring the equipment. Many companies have a minimum hiring period.
• Payment terms. Includes the amount the hiree will pay for using the equipment and how this payment will be made.
• Obligations of the hirer. Usually, they include:
  • Ensuring equipment is in good working condition at the start of the hire period
  • Offering labour personnel who are well trained to handle the equipment
  • Carrying out servicing and maintenance of the equipment in accordance with manufacturer specifications during the hire period.
• Obligations of the hiree. These are usually to bar third parties from operating the equipment and to accept responsibility for safely storing the equipment.
• Provisions on liability and indemnity. As the owner of the equipment, you will want to limit your liability for damages occasioned by equipment breakdown or failure. You will also want to distance yourself from liability arising from accidents caused by improper handling of equipment.
• Applicability of the Personal Property Securities Act to the agreement.

What does a wet hire agreement not include?

This agreement does not include terms to the effect that the equipment's ownership shifts from the hirer to the hiree. A wet hire agreement is not a sale agreement. Even during the hire period, the hirer retains exclusive ownership of the property. The hiree cannot sell, charge, offer, assign or pledge the equipment.

How effective is a wet hire agreement?

This agreement is effective in protecting an owner's equipment from negligent or reckless use by third parties. It guarantees that, while property is hired out, it remains in the capable and competent hands of the owner's staff. Third parties are strictly restricted from operating the equipment, limiting the risk of losses from damage.

Do I need a lawyer for a wet hire agreement?

Yes. A wet hire agreement is a complex legal document and it can give rise to significant liability. If you get certain terms wrong, such as the equipment's description at the beginning of the hire period, you could compromise your right to indemnity for damage. Furthermore, provisions on issues like liability, insurance and indemnity are best written by a competent lawyer to prevent costly errors.

You can use a template to write a wet hire agreement and then have a lawyer review it.

Get access to customisable wet hire agreement templates online

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How do I write a wet hire agreement?

To write a wet hire agreement, download a template from one of the sources below, follow the prompts and customise it for your own business. Exercise extra caution when filling in details on the condition of your equipment prior to hiring and also on provisions relating to parties' obligations, liability and indemnity.

If you do not have legal background, you will need a lawyer to guide you through writing a wet hire agreement. Involving a lawyer will ensure you do not inadvertently make errors that prove costly later on.

Where to get free legal documents and templates like a wet hire agreement

There are online legal resources that offer small businesses free legal document templates that are downloadable and customisable. They include:

• Lawpath. Grants access to hundreds of legal documents free for subscribed members. Subscriptions are renewable monthly for as low as $24.
• Sprintlaw. A 100 percent online law firm, Sprintlaw has a wet hire agreement package that includes the legal document and tailored counsel from one of its lawyers.
• LegalVision. This platform combines access to legal documents with standby legal counsel and offers the two as a package to its subscribers. Monthly subscription fee is $199.