Equipment Hire Agreement Lawyers Adelaide: Hire Terms, Damage, Insurance and PPS Leases
Equipment and event hire agreements in South Australia
A hire agreement decides who pays when equipment comes back damaged or late, and whether a hire business can recover its equipment if a hirer fails. Talon Legal drafts and reviews hire agreements for Adelaide equipment hire and event hire businesses, and reviews hire terms for the builders, event organisers and other businesses that hire from them. Book a same-day free 30-minute consultation or call (08) 7094 2021.
Equipment hire agreement key facts
| Issue | Position in South Australia |
|---|---|
| Consumer hirers | Supply includes hire (ACL section 2(1)), so hired goods must be of acceptable quality (section 54), and a term excluding the guarantees is void (section 64(1)). For business-type goods, liability can be limited to repair or replacement (section 64A). |
| Unfair terms | An unfair term is void in a standard form contract with a consumer or small business, and since 9 November 2023 proposing or relying on one is a contravention (sections 23 and 24). |
| Damage, cleaning and late return charges | Open to challenge if out of all proportion to the interests protected (Paciocco v ANZ, Kiefel J (French CJ agreeing) at [29]). |
| PPS lease | A hire for more than 2 years, or a shorter, renewable or open-ended hire that may run, or does run, past 2 years, by a business regularly engaged in leasing or bailing goods (PPSA section 13). The hire business's interest is then a security interest (section 12(3)(c)). |
| Hirer insolvency | An unperfected security interest vests in the hirer immediately before its winding up, administration, deed of company arrangement, restructuring or bankruptcy (section 267). |
| Time limit | Simple contract and tort claims, such as unpaid hire or damage: six years (Limitation of Actions Act 1936 (SA) section 35). |
| First step | Same-day free 30-minute consultation. Call (08) 7094 2021. |
Need an equipment hire agreement lawyer in Adelaide?
Our equipment hire agreement lawyers in Adelaide act for equipment hire and event hire businesses, and for builders, event organisers and venues reviewing a hire company’s terms. The Australian Consumer Law (ACL), in Schedule 2 of the Competition and Consumer Act 2010 (Cth), applies the consumer guarantees and the unfair terms rules to hire. The Personal Property Securities Act 2009 (Cth) (PPSA) treats a long-term hire as a security interest. This page states the law current to 6 November 2026.
This guide is part of our skilled trades and licensed industries practice. Related guides cover event management agreements, terms of trade and retention of title and deeds of guarantee.
Free Consultation. Send us your hire agreement or booking terms. Book a same-day free 30-minute consultation or call (08) 7094 2021.
On this page
- What should an equipment hire agreement cover?
- Who is responsible for the equipment during the hire?
- How should damage and loss be dealt with?
- Can a hire business charge cleaning and late return fees?
- How do bonds, insurance and damage waivers work?
- Do the consumer guarantees apply to hired goods?
- Which hire terms can be unfair?
- When is a hire a PPS lease?
- What happens to hired equipment if the hirer becomes insolvent?
- How is event hire different from equipment hire?
- How similar matters tend to play out
- How we act on hire agreements
- Case law
- Frequently asked questions
What should an equipment hire agreement cover?
Everything between the booking and the return, usually in these parts.
- The equipment, the hire period and a default end time.
- The price, deposit and balance, and when each is due.
- Delivery, set-up, collection and who pays for them.
- Charges for damage, loss, cleaning and late return.
- The bond, and the insurance or damage waiver.
- Permitted use, site conditions and sub-hire.
- Cancellation, limits on liability and disputes.
A person who signs a document known to contain contractual terms and to affect legal relations is generally bound by them, read or not. That is so absent a vitiating element or a claim for equitable or statutory relief (Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 at [57]). Online bookings work too: a transaction is not invalid because it took place wholly or partly by electronic communications (Electronic Communications Act 2000 (SA) section 7(1)).
An equipment hire agreement lawyer will also check how the agreement handles long or rolling hires, which can bring in the PPSA.
Who is responsible for the equipment during the hire?
Usually the hirer, from delivery or collection until return. The agreement should say exactly when responsibility passes each way, including for equipment left at an unattended site at the hirer’s request.
Condition reports prevent most arguments: dated photographs at dispatch and return, and a delivery docket the hirer signs noting any existing damage. The agreement should require the hirer to use the equipment only as designed and instructed, keep it secure at the agreed site, stop using it if it becomes unsafe and report damage promptly.
Many hire businesses copy a driver’s licence on collection. A business covered by the Privacy Act 1988 (Cth) must take reasonable steps to protect personal information it holds from misuse, interference and loss, and from unauthorised access, modification or disclosure (APP 11.1). The data protection and privacy guide covers those duties.
How should damage and loss be dealt with?
With a clause that says what the hirer pays for and how it is measured. Most agreements make the hirer liable for loss, and for damage beyond fair wear and tear, while the equipment is in its care. The measure is usually the cost of repair or replacement, plus the hire charge while the item is out of service.
A clause making the hirer pay for all damage however caused, including damage the hire business’s own staff cause, is harder to defend. In a standard form contract with a consumer or small business, it invites an unfair terms challenge. In ACCC v JJ Richards & Sons Pty Ltd [2017] FCA 1224, the Court accepted that an unlimited indemnity, applying even where the loss was not the customer’s fault, caused a significant imbalance ([56](g)).
The hire business’s own exclusions, for breakdowns or damage to the hirer’s property, need the same care. Against a consumer, a term that purports to exclude, restrict or modify a guarantee is void to that extent (ACL section 64(1)).
Can a hire business charge cleaning and late return fees?
Yes, if the agreement provides for them, but a charge out of all proportion to the business’s interests is open to challenge. In Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28, Kiefel J, with whom French CJ agreed, stated the question. It is whether a provision for payment of a sum on default is out of all proportion to the interests of the party which it is the purpose of the provision to protect, which may be of a business or financial nature ([29]).
A late return charge at the daily hire rate reflects income lost while the item is not back, which makes it easier to defend. A cleaning fee should reflect the cost of cleaning.
In a standard form consumer or small business contract, two statutory examples of terms that may be unfair are relevant. One penalises only the hirer for breach or termination. The other lets the hire business alone decide whether there has been a breach (ACL section 25(c) and (h)). A fee charged whenever the business, in its absolute discretion, considers an item dirty sits close to the second.
How do bonds, insurance and damage waivers work?
A bond, or a pre-authorisation on the hirer’s card, gives the hire business a fund to draw on. The terms should say what it covers, how deductions are worked out, how the hirer is told and when the balance is refunded.
Insurance is usually the hirer’s job. Hire agreements commonly require cover for the equipment’s replacement value and public liability cover, and some hire businesses will not deliver without a certificate of currency. A damage waiver works differently. For a fee, the hire business limits what the hirer pays for accidental damage, usually to an excess, and the waiver should list what it does not cover, such as misuse.
In deciding whether a term is unfair, the court must take its transparency into account. A term is transparent if it is in reasonably plain language, legible, presented clearly and readily available (ACL section 24(2) and (3)).
Do the consumer guarantees apply to hired goods?
Yes, where the hirer is a consumer. Supply of goods includes supply by way of sale, exchange, lease, hire or hire-purchase (ACL section 2(1)), so the guarantees can apply to goods hired to a consumer. A person acquires goods as a consumer if the amount paid or payable did not exceed $100,000 (section 3(1)(a); regulation 77A of the Competition and Consumer Regulations 2010). Most event hires are within that figure. A person is not a consumer of goods acquired for re-supply, or to use up or transform in trade or commerce in production or manufacture, or in repairing or treating other goods or fixtures (section 3(2)).
Goods supplied to a consumer, other than by auction, must be of acceptable quality (section 54). They must also be reasonably fit for any purpose the hirer disclosed (section 55(1)). Where the hire business also installs the equipment, those services must be rendered with due care and skill (section 60). A term is void to the extent it purports to exclude, restrict or modify a guarantee (section 64(1)).
For goods not of a kind ordinarily acquired for personal, domestic or household use, liability may be limited to repair or replacement, or the cost of either, except for sections 51 to 53 (section 64A(1)). The limit does not apply if the hirer establishes that relying on it would not be fair or reasonable (section 64A(3)). Where a guarantee is not met, a consumer can recover damages for reasonably foreseeable loss (section 259(1) and (4)).
A fault reporting clause can ask for prompt reporting, but should not suggest that a consumer loses its rights by reporting late. In ACCC v Booktopia Pty Ltd [2023] FCA 194, Booktopia admitted liability. It accepted that a term requiring notice of faulty items within 2 business days of delivery represented that consumers had to notify within that time to have a remedy ([15], [18]). A $6,000,000 penalty was ordered for the section 29(1)(m) contraventions.
Which hire terms can be unfair?
An unfair term in a standard form hire contract with a consumer or small business is void (ACL section 23(1)). Hire is a supply of goods (section 2(1)), and a contract for the supply of goods is a small business contract if at least one party employs fewer than 100 persons, or had turnover under $10,000,000 for its last income year (section 23(4)). A contract alleged to be standard form is presumed to be one unless another party proves otherwise (section 27(1)).
A term is unfair if it would cause a significant imbalance in the parties’ rights and obligations, is not reasonably necessary to protect the legitimate interests of the party it advantages, and would cause detriment if applied or relied on (section 24(1)). The party a term advantages, usually the hire business, must prove it is reasonably necessary (section 24(4)). Statutory examples of terms that may be unfair include terms that let only the hire business terminate (section 25(b)) or vary the terms (section 25(d)). A clause letting it amend its terms at any time, with a further booking taken as acceptance, falls within the second.
In JJ Richards, the Court declared, on agreed facts, that eight terms of small business standard form contracts were unfair and void, among them an automatic renewal term. The Court accepted that it caused a significant imbalance: it bound customers to a further term of equal length unless they cancelled within 30 days before the end of the term, with no requirement to notify them of expiry ([56](a)). At that time an unfair term was void but not penalised.
Since 9 November 2023, making a standard form consumer or small business contract containing an unfair term the hire business proposed, or applying or relying on one, is a contravention, and each term counts separately (section 23(2A) to (2C)). The maximum penalty for a body corporate is the greater of $100,000,000 and three times the benefit or, if that cannot be determined, 30% of adjusted turnover during the breach turnover period. For anyone else it is $2,500,000 (section 224(3) and (3A)).
When is a hire a PPS lease?
When it is long, or may become long, and the hire business is in the business of hiring. Section 13(1) covers a lease or bailment of goods in these cases.
- For a term of more than 2 years (section 13(1)(a)).
- For a term of up to 2 years that is automatically renewable, or renewable at a party’s option, if the total of all terms might exceed 2 years (section 13(1)(c)).
- For a term of up to 2 years, or an indefinite term, where the hirer keeps substantially uninterrupted possession, with consent, for more than 2 years, but only once possession extends beyond 2 years (section 13(1)(d)).
It is not a PPS lease if the lessor or bailor is not regularly engaged in the business of leasing or bailing goods (section 13(2)(a) and (b)). Only a bailment for value counts (section 13(3)).
The interest of a lessor or bailor under a PPS lease is a security interest, whether or not the transaction in substance secures payment (section 12(3)(c)). It is also a purchase money security interest (section 14(1)(c)). The rules that protect a supplier’s retention of title then apply: an agreement in writing, signed or accepted by the hirer, that describes the equipment (section 20(1) and (2)), and perfection by registration (section 21). The interest has PMSI priority if registered in time and stated to be a PMSI (section 62). The terms of trade and retention of title guide sets out those deadlines.
Rolling hires are the trap. Hire businesses with long or rolling hires commonly register when the hire starts, rather than track each one to the 2-year mark.
What happens to hired equipment if the hirer becomes insolvent?
If the hire is a PPS lease and the interest is unperfected, the hire business can lose the equipment. Section 267 applies when a company is wound up, an administrator is appointed, a deed of company arrangement is executed or a restructuring practitioner is appointed, or a person becomes bankrupt. A security interest the company or person granted, and that is unperfected at the relevant time, vests in the grantor immediately before the event (section 267(1) and (2)). Under a PPS lease, the hire business’s interest in its own equipment is the security interest (section 12(3)(c)), so section 267 can vest that interest in the hirer.
A perfected interest is not caught by section 267. A short hire that is not a PPS lease, and does not in substance secure payment, is not a security interest at all (section 12(1)). A director’s guarantee on the hire account gives a second avenue for unpaid hire and damage (see deeds of guarantee).
How is event hire different from equipment hire?
Event hire is short, often to consumers, and much of the risk sits at someone else’s venue. The terms need to deal with delivery windows, venue access and the venue’s consent, installing structures, weather, and breakages across many small items. Deposits and a cancellation scale that reflects bookings turned away matter more. Consumer law weighs more heavily too, because more hirers are consumers (section 3(1)(a)). The quotes and variation agreements guide covers deposits and cancellation charges.
Equipment hire is often longer and to businesses, and the risk sits in how the equipment is used. The terms need more on operator competence, safety instructions, servicing and breakdowns. Long or rolling hires also bring in the PPSA.
How similar matters tend to play out
Illustrations of how the law on this page combines on ordinary facts, not predictions. Outcome depends on the documents, the evidence and the court.
Lower range. A business hires a generator for a weekend market and returns it a day late. Its signed hire agreement charges the daily hire rate for each extra day. The charge was agreed in advance (Toll v Alphapharm at [57]) and reflects hire income lost, so it is unlikely to be out of all proportion to the interests it protects (Paciocco, Kiefel J at [29]).
Middle range. A couple hires a marquee for an outdoor wedding reception and tells the hire business how it will be used. A torn panel lets in rain and spoils the reception. The couple are consumers (section 3(1)(a)), so the marquee had to be of acceptable quality and fit for the disclosed purpose (sections 54 and 55(1)). A clause excluding liability for weather damage is void to the extent it excludes those guarantees (section 64(1)).
Upper range. A civil contractor hires an excavator on an open-ended hire and keeps it for 30 months. The hire business, which hires out plant for a living, never registers, and the contractor’s company is wound up. The hire became a PPS lease once the contractor had kept the excavator for more than 2 years (section 13(1)(d)), so the hire business’s interest was a security interest (section 12(3)(c)). Unperfected, it vested in the company immediately before the winding up (section 267). The hire business can lose a machine it owns.
How we act on hire agreements
Our equipment hire agreement lawyers act for equipment and event hire businesses, and for the businesses and organisers that hire from them. For a hire business, the aim is charges that hold up and equipment that comes back or is paid for. For a hirer, it is a fair share of the risk.
| Stage | What happens | What we do |
|---|---|---|
| Terms | The hire agreement and booking terms are drafted or reviewed. | Draft the hire, damage, charges, bond, insurance and use terms. |
| Consumer check | Some hirers are consumers or small businesses. | Check the guarantees, fault reporting and unfair terms exposure. |
| Long hires | Hires run past 2 years or roll over. | Identify PPS leases and set up registration. |
| Dispute | Equipment comes back damaged, late or not at all. | Advise on the agreement, quantify the claim and draft the demand or response. |
| Insolvency | A hirer fails holding equipment. | Advise on recovery, the security interest and any guarantee. |
We cannot promise an outcome, and no lawyer can. We can make sure your hire agreement says what happens before something goes wrong.
Every hour matters. Book a same-day free 30-minute consultation, or call (08) 7094 2021 now.
Hire agreement case law
None of the decisions below concerned an equipment or event hire agreement; each decided a point that applies to one.
| Case | Court | Principle | Pinpoint |
|---|---|---|---|
| Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 | High Court | A signed contractual document binds, read or not | [57] |
| Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28 | High Court | Test for a sum payable on default | [29] |
| ACCC v JJ Richards & Sons Pty Ltd [2017] FCA 1224 | Federal Court | Automatic renewal and indemnity terms unfair | [56] |
| ACCC v Booktopia Pty Ltd [2023] FCA 194 | Federal Court | Short notification term misrepresented consumer rights | [15], [18] |
Case notes
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52
The joint reasons stated the general rule that a person who signs a document known to contain contractual terms and to affect legal relations is bound by them, read or not, absent a vitiating element or a claim for equitable or statutory relief ([57]).
Paciocco v Australia and New Zealand Banking Group Ltd [2016] HCA 28
Kiefel J, with whom French CJ agreed, asked whether a provision for payment of a sum on default is out of all proportion to the interests it is intended to protect ([29]). Both appeals were dismissed with costs.
ACCC v JJ Richards & Sons Pty Ltd [2017] FCA 1224
On agreed facts, Moshinsky J declared eight terms of small business standard form contracts unfair and void, accepting that the automatic renewal, price variation and unlimited indemnity terms caused a significant imbalance ([56]).
ACCC v Booktopia Pty Ltd [2023] FCA 194
Booktopia admitted liability and accepted that its 2 business day notification term represented that consumers had to notify within that time to have a remedy ([15], [18]). Burley J ordered a $6,000,000 penalty for the section 29(1)(m) contraventions.
Frequently asked questions
Who pays if hired equipment is damaged?
Usually the hirer, for loss and for damage beyond fair wear and tear while the equipment is in its care. On standard terms with a consumer or small business, a clause making the hirer pay for all damage however caused may be unfair (ACL section 24; JJ Richards at [56](g)).
Can a hire company charge for late return?
Yes, if the agreement provides for it. A charge on default that is out of all proportion to the interests it protects is open to challenge (Paciocco v ANZ, Kiefel J at [29]).
Do the consumer guarantees apply to hired equipment?
Yes, where the hirer is a consumer. Supply of goods includes supply by way of hire (ACL section 2(1)), and hired goods must be of acceptable quality (section 54).
Can a hire agreement exclude all liability?
Not against a consumer. A term is void to the extent it purports to exclude, restrict or modify a consumer guarantee (ACL section 64(1)). For goods not ordinarily acquired for personal, domestic or household use, liability can be limited to repair or replacement (section 64A).
What is a PPS lease?
A lease or bailment of goods for more than 2 years, or a shorter, renewable or open-ended one that may run, or does run, past 2 years, by a business regularly engaged in leasing or bailing goods (PPSA section 13).
Should a hire business register on the PPSR?
Yes, for hires that are or may become PPS leases. An unperfected security interest vests in the hirer if it is wound up, enters administration or becomes bankrupt (section 267).
Do unfair contract terms laws apply to hire agreements?
Yes, to standard form hire contracts with consumers and small businesses. An unfair term is void (ACL section 23(1)), and since 9 November 2023 proposing or relying on one is a contravention (section 23(2A) and (2C)).
Can a hire business require faults to be reported within 24 hours?
It can ask for prompt reporting, but must not misrepresent a consumer’s rights (ACL section 29(1)(m)). In Booktopia, a 2 business day notification term was accepted to represent that consumers had to notify within that time to have a remedy ([18]).
How long does a hire business have to sue for unpaid hire or damage?
Six years. Actions founded on simple contract or tort must be commenced within six years after the cause of action accrued (Limitation of Actions Act 1936 (SA) section 35).
Do I need an equipment hire agreement lawyer?
For a hire business using the same terms with every customer, yes. An equipment hire agreement lawyer can set up terms that make damage and late charges recoverable and protect long hires under the PPSA. A free 30-minute consultation will tell you where you stand.
Related skilled trades guides
Related guides
- Skilled trades and licensed industries lawyers Adelaide
- Event management agreements
- Terms of trade and retention of title
- Deeds of guarantee
- Subcontractor agreements
- Cleaning, security and maintenance agreements
- Quotes and variation agreements
- Service agreements and terms of business
- Online sales terms and consumer law