Is a written hire agreement legally necessary?

While verbal hire agreements can be legally binding in Australia, they are extremely difficult to enforce because there is no documented evidence of the agreed terms. A written hire agreement provides clear, enforceable terms that protect both parties. For any hire of significant value or duration, a written agreement is strongly recommended and is standard industry practice.

Who is responsible for insurance during the hire period?

This depends on the agreement. The most common arrangement is for the hirer to insure the equipment for the hire period, with the owner specified as an interested party on the policy. Some hire companies include insurance in the hire rate. The agreement should clearly state who is responsible, the minimum cover required and who bears the excess in the event of a claim.

What happens if the equipment is damaged during hire?

The hire agreement should specify the process for handling damage. Typically, the hirer is responsible for damage that occurs during the hire period, excluding fair wear and tear. The condition report at handover and return provides the evidence to assess whether damage occurred during the hire. Insurance may cover the repair cost, with the hirer responsible for the excess.

Is this equipment hire agreement template free?

Yes. This equipment hire agreement template is completely free to download and use. Open the HTML file in any browser and print to PDF. Customise the terms to suit your specific requirements. No MapTrack account is required. This template provides a starting point; consider legal advice for high-value hires.

How long should signed hire agreements be retained?

Retain signed hire agreements and the supporting condition reports for a minimum of seven years from the end of the hire period. Under the Limitation of Actions Act in most Australian states, a party has six years to bring a contract dispute, so seven years of retention gives a one-year margin for late-filed claims. Section 262A of the Income Tax Assessment Act 1936 also requires records supporting GST and income tax deductions to be kept for five years from the relevant tax year. Where the equipment is high-value or the hire spans multiple financial periods, retain agreements until the longer of seven years or the period required by your insurer for claim history.

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Download a free equipment hire agreement template. Cover rates, duration, condition, liability and return terms. PDF ready to print.

Jarrod Milford

Commercial Director

Updated 3 May 2026

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Updated 3 May 2026

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What is a equipment hire agreement?

An equipment hire agreement is a formal document that sets out the terms and conditions under which equipment is hired from one party to another. The agreement covers the equipment description, hire period, rates, payment terms, delivery and return arrangements, condition at handover, responsibilities for maintenance and insurance, liability for damage or loss, and the process for resolving disputes.

Equipment hire is a common practice across construction, mining, events, agriculture and many other industries where the cost of purchasing specialised equipment outright is not justified by the frequency of use. A well-drafted hire agreement protects both the owner and the hirer by setting clear expectations. Without a written agreement, disputes over damage, maintenance responsibility, late returns and payment terms can be costly and time-consuming to resolve. The agreement also provides the documentation needed for insurance claims if the equipment is damaged or stolen during the hire period.

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Benefits of using this equipment hire agreement

Clear terms: both parties understand the hire period, rates, payment terms and return conditions before the hire begins.
Damage accountability: documenting condition at handover and return makes it clear whether damage occurred during the hire period.
Insurance clarity: the agreement specifies who is responsible for insuring the equipment and what cover is required.
Maintenance responsibility: defines who is responsible for routine maintenance and repairs during the hire period.
Dispute prevention: written terms reduce the likelihood of disputes and provide a reference point if they arise.
Legal protection: a signed agreement is a legally enforceable contract that protects both parties.

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What to include in a equipment hire agreement

This equipment hire agreement covers 12 key areas:

Parties: full legal names and contact details for the owner (lessor) and the hirer (lessee).
Equipment details: description, make/model, serial number, registration (if applicable), condition at handover.
Hire period: start date, end date, provisions for extension, notice period for early termination.
Rates and payment: hire rate (daily, weekly, monthly), payment terms, deposit, bond, late payment charges.
Delivery and return: delivery arrangements, return location, return condition requirements.
Condition report: condition at handover with photographs, condition at return with photographs.
Maintenance: who is responsible for routine maintenance, servicing and consumables during the hire period.
Insurance: who insures the equipment, minimum cover required, excess responsibility.
Liability: liability for damage, loss, theft, third-party claims, limitation of liability.
Indemnity: indemnity provisions for each party.
Dispute resolution: process for resolving disputes (negotiation, mediation, arbitration).
Signatures: both parties, date, witness (optional).

How to use this equipment hire agreement

Complete the equipment details and conduct a joint condition inspection before handover.: Record the equipment description, serial number and condition. Both parties should inspect the equipment together, noting any existing damage, wear or defects. Take photographs from multiple angles. Both parties sign the condition report section to acknowledge the handover condition.
Agree and document the hire period, rates and payment terms.: Specify the exact start and end dates, the hire rate, payment frequency and method, any deposit or bond required, and charges for late return or early termination. Be specific to avoid ambiguity.
Define maintenance, insurance and liability responsibilities.: Specify who is responsible for routine maintenance (fuel, oil, filters, tyres) during the hire period. State the insurance requirements, including minimum cover type and amount, and who bears the excess. Clarify liability for damage, loss and third-party claims.
Both parties review, agree and sign the agreement.: Both parties should read the full agreement and ask questions about any terms they are unclear on. Once agreed, both parties sign and date the agreement. Each party retains a signed copy. The agreement becomes effective from the handover date.
At return, conduct a joint condition inspection and sign off.: When the equipment is returned, both parties inspect it and compare against the handover condition report. Document any new damage. Calculate any charges for damage, excess usage or late return. Both parties sign the return section. Process the bond refund or damage claim as applicable.

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How often should you complete this form?

An equipment hire agreement should be completed for every hire transaction, regardless of the value or duration. Even informal hires between related businesses should be documented. The agreement is a one-off document per hire event, not a recurring form.

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