How To Get Out Of A Copier Lease Agreement (Sample for Termination Letter)
Renting copier equipment is not a new thing for any business. If you are reading this article, some of you might be stuck with a copier that is no longer helpful for your business. Now the million-dollar question is – how to get out of a copier lease that is not suitable for your company? This article discusses how to break free from a copier lease with as minimal financial loss as possible. What Is A Copier Lease Agreement? A copier lease or copier machine rental agreement is a contractual agreement between the renting company and a business. This agreement is enforceable by law. The rental company allows the business to use the copier for monthly rent. The period of the agreement will usually be from one to three years. Several providers give businesses an option to purchase the machine at the end of the lease period. Printing technology is advancing every day, and the market is constantly replaced with printers having newer features. Let’s suppose you have invested in a high-tech printer for your office. With the current technological advancement rate, the chances are high that your printer will be obsolete in a few years. Thus renting a copier makes more business sense. How Do Copier Leases Work? Various leasing companies provide printers after signing a contract. The contract is usually for a period of 12 months to 60+ months, depending on the prior agreement with the provider. Ensure that you read all the clauses before signing. You could often find provisions that state that the lessee is responsible for selecting a vendor and are accountable for the quality of service they receive. However, once you have signed a contract, it is equally binding for both parties. Copier Lease Agreement vs. Service Agreement While copier lease only concerns the copier being leased, service agreement covers a lot more such as supply orders, remote support, machine maintenance, downtime servicing, etc. In short, a service agreement is a contract that you have made with the dealer concerning all the services that they will provide you and at what cost. What types of copier service agreements exist? There are two types of copier service agreements. One is a Smart Copy Agreements, and the other is a Fair Market Value (FMV) Lease. The former one combines your services and leases into one single agreement. This is helpful if you have multiple locations and wish to receive a single bill every month. This is beneficial for businesses as they will be receiving a consolidated bill every month instead of paying each time separately. In the Fair Market Value (FMV) Lease, the lease agreement will be independent of the service agreement, making it easier to cancel the contract. If you need to pay multiple bills, FMV may seem a bit of a hassle, but it is worthwhile if you are a single-site business. You will still have to finish your copier’s payments, but it gives you the flexibility to switch your service provider. Smart copy agreements present some roadblocks for businesses if you try to get out a copier service agreement. But if you are happy with your current service provider, it is always wise to choose smart copy agreements as you will get a consolidated bill at the month-end. What should you look for in your copier service agreement? While going through the contract, carefully check if there are clauses for: Why Do Your Copier Service Costs Go Up? When you sign up for a copier service contract, the provider will give you a brand new copier. For the first one or two years, there won’t be any problem with the functionality. But as time goes by, wear and tear happen, and the parts need to be repaired or replaced. The service technician will use Preventative Maintenance (PM) Kits to retain the machine’s working quality. So if you are wondering why your copier service costs are shooting year after year, it may mean that your machine is getting old and the technician is replacing old parts with newer ones. What Should You Check Before Breaking Your Copier Lease? If you are planning to lease a copier, there are several aspects that you should carefully look at in a contract. Most contracts are designed to protect the parties issuing the contract from as many scenarios as possible. Following are some of the things that you should check in a copier lease: Breach of contract Malaysian laws are strict when it comes to enforcing a service contract, so it is pretty challenging to break a copier lease contract. The only way to get out is gross negligence on the part of the provider. If you think that their service is slow or the machine breaks down, you could add in gross negligence. Unfortunately, though, there are no legal provisions for that. To add to gross negligence, it would have to be extreme, like never coming to fix your machine after repeated complaints or never maintaining the device, etc. A quality service provider will make sure that they build brand trust by any means, even if they have to admit their faults and allow the company to move out of the agreement. Automatic renewal This is a clause in the agreement that allows the service provider to renew someone’s business. If such a clause is included in the contract, you will have to serve a letter of notice at least 30-90 days before the contract’s termination. Failing to do so will cause the contract to renew itself for an additional 12 months (depending on the agreement). Make sure that you are fully aware of the cancellation procedure of the contract with the company. Early termination fee Before getting into a contract, make sure that you are aware of any early termination fees. Copier dealers often penalize businesses for early termination of the contract as per the Malaysian Contract Act. Some providers will penalize you if you breach their Intent policy letter, while others will hold you to fulfil the …
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