Commercial Truck Lease Agreement Template

COMMERCIAL TRUCK LEASE AGREEMENT TEMPLATE

1. DOCUMENT PREAMBLE & RECITALS

THIS COMMERCIAL TRUCK LEASE AGREEMENT (the "Agreement") is entered into and made effective as of this [Day] day of [Month], [Year] (the "Effective Date"), by and between:

LESSOR: [Lessor Company Name], a [State of Incorporation/Organization] [Corporation/LLC/Partnership], having its principal place of business located at [Lessor Street Address, City, State, Zip Code] (hereinafter referred to as the "Lessor"); and

LESSEE: [Lessee Company Name], a [State of Incorporation/Organization] [Corporation/LLC/Partnership], having its principal place of business located at [Lessee Street Address, City, State, Zip Code] (hereinafter referred to as the "Lessee").

RECITALS:

WHEREAS, Lessor is the lawful owner of, or possesses valid and unencumbered leasehold rights to, certain commercial motor vehicles described herein; and
WHEREAS, Lessee desires to lease from Lessor, and Lessor desires to lease to Lessee, the commercial motor vehicles subject to the terms, covenants, conditions, and provisions hereinafter set forth; and
WHEREAS, the Parties intend for this transaction to constitute a true lease of equipment and not a disguised financing arrangement or security agreement;

NOW, THEREFORE, in consideration of the mutual covenants, promises, representations, and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

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2. OPERATIONAL DEFINITIONS

For the purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, the following terms shall have the meanings assigned to them below:

1. "Agreement" means this Commercial Truck Lease Agreement, together with all attached Schedules, Exhibits, Riders, and duly executed Amendments.
2. "Base Rent" means the fixed periodic financial compensation payable by Lessee to Lessor for the right to use and operate the Leased Vehicle(s), as set forth in Section 3.2.
3. "Business Day" means any day other than a Saturday, Sunday, or any other day on which commercial banks in the Primary Jurisdiction are authorized or required by law to close.
4. "Default" means any event, circumstance, or failure of performance specified in Section 4.1 of this Agreement.
5. "DOT" means the United States Department of Transportation, or any successor federal agency having regulatory jurisdiction over commercial motor vehicles and interstate commerce.
6. "Effective Date" has the meaning ascribed to it in the preamble of this Agreement.
7. "FMCSA" means the Federal Motor Carrier Safety Administration, or any successor agency.
8. "Force Majeure" means acts of God, strikes, lockouts, or other industrial disturbances, acts of the public enemy, wars, blockades, insurrections, riots, epidemics, landslides, lightning, earthquakes, fires, storms, floods, washouts, civil disturbances, explosions, and any other similar causes beyond the reasonable control of the affected Party.
9. "Lease Term" means the duration of time commencing on the Delivery Date and continuing for [Number] months/years, unless sooner terminated in accordance with the provisions hereof.
10. "Leased Vehicle(s)" means the commercial truck(s), tractor(s), or trailer(s) described by Make, Model, Model Year, Vehicle Identification Number (VIN), and Unit Number on Schedule A attached hereto and incorporated herein by reference, including all replacement parts, additions, accessories, and equipment attached thereto or installed therein.
11. "Maintenance Schedule" means the mandatory servicing, inspection, and preventative maintenance protocols set forth in Schedule B of this Agreement, complying with all OEM specifications and DOT standards.
12. "Permitted Use" means the operation of the Leased Vehicle exclusively for lawful commercial freight transportation within the continental United States and/or [State/Region], driven only by qualified, licensed, and vetted drivers.
13. "Primary Jurisdiction" means the state of [Jurisdiction], the laws of which shall govern this Agreement.
14. "Security Deposit" means the financial sum of [Dollar Amount] deposited by Lessee with Lessor pursuant to Section 3.4 to secure the full and faithful performance of Lessee’s obligations under this Agreement.
15. "Wear and Tear" means normal, gradual deterioration of the Leased Vehicle resulting from careful and proper use and adherence to prescribed maintenance intervals, expressly excluding physical damage, misuse, abuse, neglect, or structural alterations.

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3. SUBSTANTIVE TERMS & OBLIGATIONS

3.1 Lease of Vehicles and Delivery

1. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Leased Vehicle(s) identified on Schedule A, subject to all terms and conditions of this Agreement.
2. Delivery of the Leased Vehicle(s) shall take place at [Location of Delivery] on or about [Delivery Date] (the "Delivery Date"). Upon taking possession, Lessee shall execute a Delivery Receipt acknowledging receipt of the Leased Vehicle(s) in good, operable, and roadworthy condition.

3.2 Financial Terms: Rent and Payment Structure

1. Base Rent: Lessee shall pay to Lessor Base Rent in the monthly amount of [Dollar Amount] per Leased Vehicle, payable in advance on or before the [Day] day of each calendar month throughout the Lease Term.
2. Method of Payment: All payments shall be made via Electronic Funds Transfer (ACH/Wire) to the designated bank account provided in writing by Lessor, or by check delivered to Lessor's principal place of business.
3. Late Charges: Any installment of Base Rent or other sum not paid within [Number] days of its due date shall incur a late fee equal to [Percentage] of the overdue amount or [Dollar Amount], whichever is greater, as liquidated damages to cover administrative costs.
4. Taxes and Fees: Lessee shall pay, prior to delinquency, all sales, use, excise, personal property, ad valorem, stamp, documentary, and other taxes, assessments, tolls, registration fees, licensing fees, and permit costs arising from the possession, operation, or use of the Leased Vehicle(s) during the Lease Term.

3.3 Operating Conditions, Compliance, and Custody

1. Exclusive Possession and Control: During the Lease Term, Lessee shall have exclusive possession, control, and use of the Leased Vehicle(s), and shall assume complete responsibility for the operation thereof in accordance with applicable federal, state, and local laws.
2. Regulatory Compliance: Lessee shall at all times comply with all rules, regulations, statutes, and safety mandates promulgated by the DOT, FMCSA, EPA, OSHA, and any other regulatory authority having jurisdiction over commercial motor vehicle operations.
3. Driver Qualifications: Lessee shall ensure that all individuals operating the Leased Vehicle(s) possess valid commercial driver's licenses (CDLs) with appropriate endorsements, meet all FMCSA physical qualification standards, are enrolled in a compliant drug and alcohol testing consortium, and have clean driving records acceptable to Lessee’s and Lessor’s insurers.
4. Prohibited Uses: Lessee shall not use, or permit the Leased Vehicle(s) to be used, for any unlawful purpose, outside the geographic boundaries authorized herein without prior written consent, for driver instruction without express written permission, or while the driver is under the influence of alcohol, narcotics, or controlled substances.

3.4 Security Deposit

Upon execution of this Agreement, Lessee shall deposit with Lessor the Security Deposit as collateral security for the performance of Lessee's obligations. Lessor may apply all or part of the Security Deposit to cure any Default by Lessee. If Lessor applies any portion of the Security Deposit, Lessee shall restore the full amount within [Number] Business Days of written notice. Upon expiration of the Lease Term and return of all Leased Vehicle(s) in compliant condition, the remaining balance of the Security Deposit shall be returned to Lessee without interest within [Number] days.

3.5 Maintenance, Repairs, and Inspections

1. Lessee Maintenance Obligations: Lessee, at its sole cost and expense, shall maintain the Leased Vehicle(s) in top mechanical, electrical, and cosmetic condition, strictly adhering to the Maintenance Schedule (Schedule B) and all Original Equipment Manufacturer (OEM) recommendations.
2. Inspections: Lessor, or its authorized agents, reserves the right to inspect the Leased Vehicle(s) upon [Number] hours prior written notice at any reasonable time to verify compliance with maintenance and operational covenants.
3. Modifications: Lessee shall not make any structural alterations, modifications, or additions to the Leased Vehicle(s) without the prior written consent of Lessor. Any unauthorized modifications shall become the property of Lessor, or at Lessor's option, be removed by Lessee at Lessee's expense, restoring the vehicle to its original condition.

3.6 Risk of Loss, Insurance, and Indemnification

1. Risk of Loss: Lessee bears all risk of loss, damage, theft, destruction, or condemnation of the Leased Vehicle(s) from the Delivery Date until the vehicle is formally returned to and accepted by Lessor.
2. Insurance Requirements: Throughout the Lease Term, Lessee shall maintain, at its sole expense, comprehensive commercial automobile liability insurance, physical damage insurance (comprehensive and collision), and motor truck cargo insurance with carriers rated "A-" or better by A.M. Best.
   • Liability Coverage: Minimum combined single limit of [Dollar Amount] per occurrence for bodily injury and property damage.
   • Physical Damage Coverage: Coverage equal to the full replacement value of the Leased Vehicle(s).
   • Additional Insured/Loss Payee: Lessor shall be named as an additional insured on liability policies and as a loss payee on physical damage policies. Certificates of insurance evidencing such coverage shall be delivered to Lessor prior to the Delivery Date.
3. Indemnification: Lessee shall defend, indemnify, and hold harmless Lessor, its officers, directors, employees, agents, and assigns from and against any and all claims, actions, suits, proceedings, costs, expenses, damages, and liabilities, including reasonable attorneys' fees, arising out of or connected with Lessee's possession, maintenance, use, operation, or return of the Leased Vehicle(s).

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4. DEFAULT, TERMINATION, AND REMEDIES

4.1 Events of Default

The occurrence of any one or more of the following events shall constitute an "Event of Default" under this Agreement:

1. Failure by Lessee to pay any installment of Base Rent, late fees, or other monetary obligations within [Number] days of the date when due.
2. Failure by Lessee to maintain the insurance coverage required under Section 3.6.
3. Failure by Lessee to observe, perform, or comply with any other covenant, condition, or agreement contained herein, continuing for a period of thirty (30) Business Days after written notice thereof has been given by Lessor to Lessee.
4. The filing of a petition in bankruptcy or insolvency, or for reorganization or arrangement under bankruptcy laws, by or against Lessee; the appointment of a receiver or trustee for all or substantially all of Lessee's property; or the making of an assignment for the benefit of creditors.
5. Abandonment of any Leased Vehicle by Lessee, or the seizure, attachment, or execution against any Leased Vehicle under legal process which is not released within [Number] days.
6. Revocation, suspension, or material restriction of Lessee's operating authority by the DOT, FMCSA, or state regulatory bodies.

4.2 Notice and Cure Periods

Except for payment defaults (which require a [Number]-day cure period) and insurance lapses (which constitute immediate default with zero cure period), Lessee shall have a period of thirty (30) Business Days from the date of written notice by Lessor to cure any remediable non-monetary Event of Default.

4.3 Remedies Upon Default

Upon the occurrence of any Event of Default and at any time thereafter while such default continues, Lessor may, at its sole option and without notice or demand (except as expressly required by law), exercise any one or more of the following legal and equitable remedies:

1. Termination: Declare this Agreement terminated, whereupon Lessee's right to use and possess the Leased Vehicle(s) shall immediately cease.
2. Repossession: Enter upon any premises where the Leased Vehicle(s) may be located and take immediate possession of, remove, and repossess the vehicle(s) without judicial process, breach of the peace, or liability to Lessee.
3. Acceleration: Declare all unpaid Base Rent and other sums for the remainder of the Lease Term immediately due and payable.
4. Damages: Recover from Lessee all direct, incidental, and consequential damages incurred by Lessor as a result of the Default, including costs of repossession, storage, repair, re-leasing expenses, and reasonable attorneys' fees.
5. Cumulative Remedies: The remedies provided herein are cumulative and not exclusive of any other remedies provided by law or in equity.

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5. BOILERPLATE LEGAL PROVISIONS

5.1 Severability

If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid and enforceable. If modification is not possible, the provision shall be severed, and the remaining provisions of this Agreement shall remain in full force and effect.

5.2 Entire Agreement

This Agreement, together with Schedules A and B and any attached Riders, constitutes the entire agreement between Lessor and Lessee regarding the subject matter hereof and supersedes all prior oral or written negotiations, representations, understandings, or agreements. No modification, amendment, or waiver of any provision shall be valid unless executed in writing by authorized representatives of both Parties.

5.3 Force Majeure

Neither Party shall be liable for any failure or delay in performance under this Agreement (other than for the payment of money) to the extent such failure or delay is caused by a Force Majeure event, provided that the affected Party gives prompt written notice to the other Party and uses commercially reasonable efforts to mitigate the effects thereof.

5.4 Governing Law and Venue

This Agreement, and all claims or causes of action arising out of or relating to it, shall be governed by, construed, and enforced in accordance with the substantive laws of the State of [Jurisdiction], without regard to its conflict of laws principles. The Parties irrevocably consent to the exclusive jurisdiction and venue of the state and federal courts located within [County] County, [State]`.

5.5 Dispute Resolution

1. Negotiation: In the event of any dispute arising out of or relating to this Agreement, the designated executive representatives of the Parties shall first attempt to resolve the dispute through good-faith negotiations for a period of thirty (30) days.
2. Arbitration: If the dispute is not resolved through negotiation, it shall be settled by binding arbitration administered by the American Arbitration Association (AAA) under its Commercial Arbitration Rules. The place of arbitration shall be [City, State], and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

5.6 Notices

All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed duly given: (a) upon delivery, if delivered personally; (b) one (1) Business Day after being sent by a nationally recognized overnight courier service; or (c) three (3) Business Days after being mailed by certified or registered mail, postage prepaid, return receipt requested, addressed to the respective Parties at the addresses set forth in the Preamble (or to such other address as a Party may designate by notice given in accordance with this Section).

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6. FORMAL EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties hereto have caused this Commercial Truck Lease Agreement to be duly executed by their respective authorized officers or representatives as of the Effective Date set forth above.

LESSOR: [Lessor Company Name]

Signature: ___________________________________
Printed Name: [Signatory Name]
Title: [Signatory Title]
Date: [Date]

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LESSEE: [Lessee Company Name]

Signature: ___________________________________
Printed Name: [Signatory Name]
Title: [Signatory Title]
Date: [Date]