Entering into any long-term copier contract comes with its risks, and there are always red flags to look out for in the fine print. When it comes to signing into a copier lease agreement, some companies are not necessarily looking out for the clients’ best interests, so it’s important that you understand exactly what you are committing to.
5 Things to Look out for When Signing Copier Contracts
Here are the top 5 clauses to check in your copier contract.
- Contract length
The first thing you will need to check is the length of the copier contract you are signing. Understandably, the longer the length of the contract, the lower the monthly instalments will be, but then you might be stuck with a dated machine that isn’t keeping up with the needs of your growing business. The copier lease agreements are usually in the region of 12, 24, 36, 48 or 60 months. If you choose a lengthier contract, check whether you would be able to transfer to a bigger or newer machine within the contract period.
- Personal guarantee
Some copier suppliers might include a clause regarding a ‘personal guarantee’ which essentially locks you, personally – the signatory – into a lease. The person who signs the agreement is held responsible for the full term of the lease, so if the company defaults or is declared bankrupt, the supplier will still have to be paid.
Copier suppliers generally calculate a cost per page or cost per copy (CPC), with the copier contract then limited to a certain percentage. Thereafter, there will be cost escalations implemented. It’s important to ask exactly how the CPC is calculated, and what the cost escalations are if the limit is exceeded.
- Additional insurance
Generally businesses will have insurance which covers the damage or theft of office equipment. Most copier lease agreements will require insurance for the machinery and this will be included in the contract. Check with your broker as to whether the leased copier equipment is insured and make sure you’re not being charged twice for insurance. If you do not have insurance, make sure the supplier outlines the terms of insurance so you know exactly what is covered.
- Automatic renewal
This is a clause found in many lease agreements and will need to be checked in any copier contract as well. When the lease is about to expire, the contract might stipulate that you have to notify the supplier – in writing – that you will not be renewing the lease and will return the equipment within a specific timeframe. If you fail to do so, you might be locked into another year-long copier agreement that you don’t want.
Leasing a copier is often a financially smart move for a business, particularly if you’re working with a reputable supplier offering quality photocopiers. Just make sure you read over the contract carefully, and don’t be scared to negotiate the terms of the contract so that they suit both parties.
Read more: A Guide to Photocopier Rental Contracts