The Role of an Equipment Agreement
A company equipment agreement is a powerful tool for any business. It can help to protect a company’s assets, ensure employees take responsibility for the equipment they choose to use, and prevent legal disputes. Essentially, it is a strong agreement that protects both the business and the company employee.
When a business purchases expensive equipment, it is usually looking to get the maximum return on its investment. If employees are not reliable and upstanding in their ability to properly care for the equipment, it could become damaged or destroyed. As a result, the company will have to invest time and money in repairs and replacements.
In addition to protecting the company’s assets , it also provides employees with clear knowledge of what will be expected from them if they choose to use any of the equipment. If they have any doubts or concerns, the agreement will clarify what their responsibilities are and how they will be held liable. If the employee disregards their responsibilities and ends up damaging the equipment, the company can use the agreement to keep both parties protected.
By outlining the specific responsibilities employees must adhere to, the agreement can also stop legal disputes from arising. If an employee breaks a piece of equipment and tries to make an excuses, it will be much harder for them to go back on their defense if it is explicitly stated in the agreement what they are expected to do.
Essential Components of an Equipment Agreement
The terms of a company equipment agreement template will vary, depending on the needs of the organization and the type of equipment involved. However, it will typically contain the following sections: Company’s Equipment – The equipment that is being loaned to the employee should be clearly identified, including a description of the equipment, serial number, company asset number, and any other relevant information about that particular type of equipment. Employee’s Right to Use Company’s Equipment – The terms under which employees may use company-owned and/or assigned equipment, including the hours of access, whether and how to report malfunctions and repairs, and stipulations on employee modification of and/or access to password-protected features. Employee’s Responsibilities for Company’s Equipment – Employees should be made responsible for any misuse of company equipment, including failure to report malfunctions or damage. It is also helpful to make clear that all maintenance or repair costs incurred by the improvement or maintenance of the equipment becomes the company’s property unless stipulated otherwise. Company’s Maintenance and Repair of Company’s Equipment – Employers make all arrangements for maintenance and repairs if it involves outside services and pays all costs related to any maintenance or repairs that are not the result of misuse of the equipment by the employee. Prohibitions – Employees are often prohibited from using company equipment for personal purposes. Additionally, employees may also not be permitted to lend company equipment to others, use them for a position other than their own, leave the equipment unsecured, or fail to report any damages. Liability – Ultimately, it is the employer’s responsibility to protect its assets, and this will involve including liability and indemnity clauses in the company equipment agreement template. For example, you may include a clause that the employee is liable for loss of company property in the event the company is not reimbursed, or that the employee indemnifies the company from any liabilities arising from the employee’s use or misuse of company equipment.
How to Build a Company Equipment Agreement Template
If you’ve decided to draft your own Company Equipment Agreement template, there are a number of tips to keep in mind:
- Select a well-known format, such as the basic Agreement, Policy, or essentially a simple letter.
- Consider how much legal language and inclusion of laws or citations of laws the agreements will contain. Typically, you don’t want to go overboard on that kind of stuff, as it increases the size and cost of the document(s) significantly.
- You may want to build in customization for specific types of equipment, whether that’s by way of an Addendum or Schedule, with serial numbered equipment, or in some other fashion.
- If the Supplier will be providing documentation and/or guidance as to the creation of the template, they’ll probably provide their own suggestions for a format, legal and otherwise, length, etc.
Equipment Agreements and the Law
When creating these company equipment templates, you should take into consideration legal aspects. Having precise language in your agreement is both a necessity and a legal requirement. At the same time, you do not want to overwhelm employees with legal jargon that they may not understand, as this could deter them from signing the agreement. In most cases, your employees will need you to explain every clause to them in "plain English." For the sake of being absolutely certain that your employee signed a legal and binding contract with an enforceable agreement, having a qualified contract attorney review your contracts for accuracy can save you money over the long haul. You definitely don’t want an employee to come back to you after they have been fired and tell you that they aren’t bound by the contract because it was not written correctly. The law is very clear and does not allow for ambiguity or vagueness in contracts, so it’s important to avoid this kind of employment contract mistake . Attempting to be vague in an effort to outsmart employees who have no knowledge of the law only harms your company in the long run. Should it go to court and you are found to be intentionally vague, the judge will not be impressed by your use of vague language or loopholes; instead, you will be ordered to pay the employee perhaps even more than you owe them. When creating your company’s equipment agreements template, it’s imperative that you adhere to all local, state, and federal laws while keeping your employees properly protected – as well as your company. You can learn a lot by looking at contracts from other reputable companies, but if you want to be certain that the contract you write is a good one, having a reputable contract attorney review the agreement can keep you well-prepared should any litigation arise over the agreement. Since keeping your company out of legal hot water is the goal when it comes to company policies and agreements, you would do best by having an attorney review it fully before asking it to sign on the dotted line.
Implementing Equipment Agreements Best Practices
Implementing company equipment agreements begins with dissemination. Employers can do this by:
Ensuring these agreements can easily be accessed and reviewed by employees. This could be through a centralized storage location on the company server, or perhaps a physical folder that is easily accessible.
Involving the human resources department in crafting, distributing and administering these agreements.
Having employees sign the agreements at the time of hire — simply including an overly broad provision in an employee’s signed offer letter is probably not enough.
Noting any restrictions on the use of company equipment in the company employee handbook (or equivalent document) in addition to including such provisions in the equipment agreement.
Implementing technology to assist in management and tracking of signed agreements. For example, do you have any follow up or reminder software that alerts you to the expiration of an agreement or some other kind of change, or a software program to log new and departed employees or randomize the assignment of different computer equipment? You may want to consider this option.
Reviewing the terms of the agreement with employees in connection with an annual performance evaluations process or other standard review process.
Filing executed equipment agreements in an electronic, logical, and/or physical location to allow for easy retrieval in the future. Moreover, in two or more of these locations, so if one fails the other can be recovered.
Storing the signed equipment agreements with a copy of the signed offer letter and/or company handbook acknowledgment form (that may refer to the equipment agreement), as well as any other agreements the employee may have signed (i.e., any work-from-home policy, or other telecommuting requirements). Finally, it is important to recognize that having the equipment agreement may not be sufficient in the case of a dispute over a particular employee’s use of company hardware or software. Allowing employees to take home company hardware or perform work off-site, especially for non-exempt employees, adds a new layer of potential liability for employers and the management of costs (if the employer must pay for the internet bandwidth, electricity, and other costs associated with the employee’s work outside of the office space).
Company Equipment Agreement Template
Company Name Equipment Agreement
This Company Equipment Agreement (Agreement) is entered into as of ___________ (Effective Date) for and in consideration of the mutual covenants set forth herein between ________________ ("Employee") and Company Name ("Company"). For purposes of this agreement, the effective date will mean the last date the employee has signed to accept the terms below.
Recitals
The Employee desires to accept employment from the Company or continue employment with the Company and as part of such the Company agrees to provide certain equipment for use by the Employee under the terms below,
Terms and Conditions
The Company agrees to provide the following equipment during the floor term of this agreement.
- A brief description of the asset
- A second brief description of the asset
- Additional descriptions as needed.
This equipment shall remain the property of the Company.
Your Responsibilities
1. You agree not to sell, offer to sell, modify, trade, give away, loan, leave, give, or otherwise transfer this equipment.
2. You agree to take care of equipment as you would your own property.
While each individual item of equipment may be very rugged in its intended use, you are responsible for maintaining and storing the equipment as per the instructions provided by the Company.
3. You will report any issues with the equipment to your manager when they occur.
Your Liability
No code violation or other regulation prohibits the use of this equipment for its intended purpose. If such a prohibition comes into effect you should return the equipment to your manager until you receive further instructions .
The Company shall be liable in accordance with its normal processes for equipment damaged while being used in accordance with the terms of this agreement. The liability shall be as follows:
- Items listed have value up to their current replacement cost.
- If repairable, it may be sent out for repair at the Company’s cost upon the receipt of a written quote.
- If repairable, the equipment may be repaired without a quote upon the approval of your manager. You may also obtain and pay for the repairs upon receiving authorization from your manager, with that amount being reimbursed to you.
Duration
This agreement remains in force until the item and the related accessories are returned in their original condition. Any damage that results from normal wear may not result in a negative liability on the part of the employee. Employees shall be held liable for items where damage is adjacent to or with evidence of the cause of damage to another item where that item belongs to that employee. The same applies to the reverse where an employee may be held responsible for damage where another employee is the owner of the impacted equipment item(s).
Change of Ownership
Should he or she change roles within the Company, this agreement shall remain in effect. The agreement will transfer from one location to another.
Expenses and Other Considerations
This equipment will be used at the employee’s own expense. The Company will not reimburse or reimburse the employee for any other expenses incurred by either of the parties as a result of servicing this equipment or anything related to it.