Equipment lease or vendor contract? Know what you are locked into.
Upload an equipment lease, hire or finance agreement, or a vendor, supply, AMC or service contract, and get the payment obligations, auto-renewal, termination charges, exclusivity and guarantees checked against Indian law.
What people are surprised to learn
Termination charges and liquidated damages are read down to actual loss.
Under Sections 73–74 of the Indian Contract Act, a stipulated sum for breach is a ceiling, not an entitlement. Equipment and vendor contracts often make every remaining rental payable on default or early exit; we flag those clauses so you can raise them before you sign.
What this review checks
- Payments that continue even if the equipment fails
- Auto-renewal and notice windows on service contracts
- Acceleration of all future rentals on default
- End-of-term purchase option and return charges
- MSME 45-day payment rule for registered suppliers (MSMED s.15–16)
- Exclusive supply and tie-ins (Competition Act s.3(4))
- GST, TDS references and personal guarantees
- Data handling by the vendor under the DPDP Act
Quick answer
What should I check in an equipment lease or vendor agreement in India?
Add up every rental, fee and GST to see the real cost; check whether payments continue even if the equipment fails; look for acceleration of all future rentals on default and for termination charges; check the auto-renewal and notice window on service and AMC contracts; see whether you must buy consumables only from the vendor; and check for a personal guarantee.
Who this review is for
- SMEs leasing or financing machinery, vehicles or medical equipment
- Restaurants and shops signing POS, kitchen equipment or AMC contracts
- Businesses signing supply, maintenance or facility service agreements
- Registered micro and small suppliers checking their payment terms
How it works
- 1
Upload the agreement
PDF, Word, a photo or pasted text, with its schedules and annexures.
- 2
Choose your state
Stamp duty, registration practice and tenancy law vary by state, so the report tells you exactly what to confirm locally.
- 3
Read the report
Payment obligations, renewal, termination charges, exclusivity and guarantees, explained plainly with the clause quoted.
- 4
Raise the points
A suggested redline and a polite email to the other side, phrased as questions rather than demands.
6 red flags to look for
Rentals payable even if the equipment never works
The financier may be a different company from the supplier, so a fault does not stop the payments.
All future rentals fall due on a single default
Acceleration and termination charges are read down to actual loss under Sections 73–74, but only if you contest them.
Auto-renewal with a narrow notice window
Miss the window and an AMC or service contract rolls over for another term.
Compulsory purchase of consumables or spares from the vendor
Tie-ins and exclusive supply are assessed under Competition Act s.3(4); they also lock in your running costs.
Payment to a registered micro or small supplier beyond 45 days
MSMED Act s.15–16 sets a 45-day limit and interest on delay for registered suppliers.
A personal guarantee from a director or partner
Your personal assets stand behind the business’s payments.
Terms explained
- Operating lease
- Renting equipment for a period without owning it at the end.
- Finance lease or hire purchase
- An arrangement that works much like a loan, often ending in ownership.
- AMC
- An annual maintenance contract for servicing equipment, usually renewing each year.
- Hypothecation
- A charge over movable assets, such as the equipment or stock, to secure payment.
- Acceleration
- A clause making all future payments due at once on default.
- Udyam registration
- Registration as a micro, small or medium enterprise, which brings the MSMED Act’s payment protection.
Pricing in India
One plan covers all 14 India analyzers. Prices exclude GST at 18%; a GST invoice with your GSTIN is available.
Single Review
₹999 one-time + GST
One contract review. No subscription, pay once, use within a year.
Pro
₹3,299 / month + GST
4 reviews / month. For founders, freelancers and consultants.
Business
₹6,599 / month + GST
10 reviews / month for HR teams and regular reviewers.
Scale
₹13,199 / month + GST
25 reviews / month for high-volume teams and firms.
Equipment & Vendor FAQs
What should I check in an equipment lease or vendor agreement in India?
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Add up every rental, fee and GST to see the real cost; check whether payments continue even if the equipment fails; look for acceleration of all future rentals on default and for termination charges; check the auto-renewal and notice window on service and AMC contracts; see whether you must buy consumables only from the vendor; and check for a personal guarantee.
Can a vendor charge all remaining rentals if I end the contract early?
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The agreement may say so, but under Sections 73–74 of the Contract Act a stipulated sum is a ceiling, not an entitlement, and is read down to actual loss. The report flags these clauses so you can negotiate them first.
I am a small supplier. How soon must I be paid?
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If you are a registered micro or small enterprise, the MSMED Act (s.15–16) requires payment within the agreed date and in any case within 45 days of acceptance, with interest on delay. The report flags payment terms longer than that.
Does this cover software subscriptions?
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Software and cloud subscriptions are better reviewed with the SaaS analyzer, which focuses on data, uptime and renewal terms.
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ClauseAudit provides information and analysis, not legal advice, and does not create an advocate–client relationship. Findings use calibrated language because enforceability depends on facts and forum. Consult a qualified advocate before acting on any finding. See India pricing.