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FAQs

If a lessee is late in making a payment due under a leasing equipment agreement, does that automatically mean that the lessee is in default?

A properly drafted leasing agreement should include a provision that sets out all of the circumstances under which a lessee will be considered to be in default under the agreement. Generally speaking, any circumstance where the lessee’s ability to pay what is due under the lease agreement is or may be compromised, such as bankruptcy proceedings or where the leased property is at risk of being lost or damaged, is a significant concern to the lessor. Accordingly, it is important to include a properly worded provision for default in a leasing agreement, as it will provide the lessor with the most flexibility ability in protecting its interests, minimizing its risk, and enforcing its rights and remedies under the agreement.

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Telephone: 905.451.3040 Fax: 905.451.5058 Email: lls@lawrences.com

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