Hire Terms & Conditions

1. DEFINITIONS

1.1 The following terms shall have the meanings set out below:-

“Acceptance Certificate” means a certificate in a form approved by SGM and signed by or on behalf or the Hirer in respect of the Equipment.

“Authorised Repairer” means (a) SGM or (b) any other dealer or repairer approved by the manufacturer of the Equipment and by SGM.

“Contract” means the contract for the hire of the Equipment between the Hirer and SGM set out in the Spot Hire Agreement including these Conditions of Hire.

“Commencement Date” means the date from which the Period of Hire commences.

“Default Rate” means the rate of 5% per annum above the Bank of Scotland’s Base Lending Rate from time to time in force.

“Equipment” means the equipment to be supplied to the Hirer pursuant to the Contract.

“Expiry Date” means the date on which the Period of Hire expires as specified in the Contract or as varied by termination (by either SGM or the Hirer) under condition 9 or recall (by SGM) under condition 9.

“Hire Payment” means the rental charge for the hire (and servicing/maintenance where 4.1.3 applies) of the Equipment as specified in the Contract.

“Hirer” means the person named as such in the Contract.

“Period of Hire” means the period of hire beginning on the Commencement Date and ending at midnight on the Expiry Date.

“SGM” means SGM Contracts LLP (Registered Number SC314501).

1.2 The headings in these Conditions of Hire are for convenience only and shall not affect their interpretation.

1.3 Except where the context otherwise requires:-

1.3.1 The singular shall include the plural and vice versa;

1.3.2 Reference to any persons includes individuals, partnerships, companies, statutory bodies, other corporate bodies and unincorporated associations;

1.3.3 Reference to any statute or regulation shall include reference to any amendment or re-enactment thereof; and

1.3.4 Sums referred to in the Contract exclude VAT which will be payable at the rate in force at the time the relevant sum is due.

1.4 The interpretation of the Contract shall be governed by Scots law and the parties agree to submit to the exclusive jurisdiction of the Court of Session in Edinburgh in respect of the resolution of any dispute in respect of the Contract.

1.5 The so-called “ejusdem generis” rule shall not apply and accordingly the interpretation of general words shall not be restricted by being preceded by words indicating a particular class of acts, matters or things or by being followed by particular examples.

2. THE HIRE

2.1 From the Commencement Date SGM agrees to let and the Hirer agrees to take on hire the Equipment upon the terms of the Contract.

2.2 The Hire of the Equipment shall, subject to the termination rights and the change of equipment rights provided for under these Conditions of Hire, continue for the Period of Hire.

2.3 The Hirer agrees to accept delivery of the Equipment only if the Equipment is satisfactory and undertakes to inspect the Equipment and to notify SGM if the Equipment is not satisfactory by giving notice in accordance with Condition 10.2. If such notice has not been received by SGM within 48 hours (excluding weekends) after delivery the Hirer will be deemed to have accepted the Equipment as being satisfactory in all respects. If required by SGM the Hirer will complete and return an Acceptance Certificate to SGM confirming that the Equipment is satisfactory in all respects.

3 Hire Payments

3.1 During the Period of Hire the Hirer will pay SGM the Hire Payments in the amounts and at the intervals specified in the Contract. Punctual payment of the Hire Payments is of the essence of the Contract and, in the event of late payment and without prejudice to SGM’s other remedies, the Hirer will pay interest on a day to day basis at the Default Rate on all amounts overdue until payment thereof.

3.2 The Hirer shall make all Hire Payments and other sums due under this Contract in full without formal demand and without set-off, deduction, counterclaim or withholding for any reason. If the Hirer is required by law to make any deduction or withholding from the Hire Payments or such other sums the Hirer shall make up any shortfall arising from such deduction or withholding such that the amounts received by SGM are equivalent to the Hire Payments or such other sums had the deductions or withholdings not been made.

4. THE HIRER’S OBLIGATIONS

4.1 The Hirer agrees:-

4.1.1 to take all reasonable and proper care of the Equipment so as to keep the Equipment in good and serviceable repair and condition (fair wear and tear excepted);

4.1.2 if the word “Yes”, where it appears opposite the words “Servicing/Maintenance Included”, has been deleted and the word “No” appears, the Hirer will carry out all periodical or other servicing/maintenance of the Equipment recommended by the manufacturers and will ensure that all such servicing/maintenance is carried out by an Authorised Repairer;

4.1.3 if the word “No”, where it appears opposite the words “Servicing/Maintenance Included”, has been deleted and the word “Yes” appears, the Hirer, working alongside the Authorised Repairer, will inform SGM when the Equipment needs such periodic or other servicing or maintenance that is required in accordance with the manufacturer’s recommended schedules and will present the Equipment for such servicing/maintenance works to be carried out by an Authorised Repairer.

4.1.3 to keep the hour meter fully operational at all times;

4.1.4 to comply with any instructions or manuals supplied by the Manufacturer or an Authorised Repairer including those dealing with daily or weekly maintenance routines;

4.1.5 to take such further steps as may be recommended by the manufacturer or any Authorised Repairer in order to ensure that the Equipment is safe and is used properly and in accordance with all applicable laws and regulations in relation to health and safety;

4.1.6 to obtain all necessary permissions, licences and consents required in connection with the use of the Equipment and to comply with all applicable laws and regulations relating to the Equipment and the use thereof and, subject to 4.1.9 and at the Hirer’s own expense, to add to or install in the Equipment any safety or other equipment required to comply with such laws and regulations;

4.1.7 only to operate and permit the Equipment to be operated in a skilful and proper manner and by persons who have received appropriate training and are competent to operate such Equipment;

4.1.8 not to alter or modify the Equipment without SGM’s prior consent in writing and to only use Authorised Repairers and genuine parts from the relevant manufacturer in the alteration, modification, maintenance and repair of the Equipment;

4.1.9 to keep the Equipment suitably stored or garaged;

4.1.10 on reasonable notice (except in case of emergency), to permit SGM or its agents to enter on any land or premises in which the Equipment is for the time being located so as to enable SGM to inspect, alter, modify, maintain and/or repair the Equipment.

4.1.11 not to remove or interfere with any identification marks or plates affixed to the Equipment nor attempt or purport to do so nor to permit the same;

4.1.12 not to deface the paintwork or bodywork of the Equipment nor add or display any painting, sign writing, lettering, or advertising to or on the Equipment without the prior written consent of SGM;

4.1.13 to provide and pay for all tyres which require to be replaced through fair wear and tear or faulty manufacture;

4.1.14 to pay for all petrol, diesel, batteries, fluids and lubricants for the proper running of the Equipment and ensure that sufficient anti freeze of the recommended type is, where applicable, maintained in the radiators;

4.1.15 in respect of the condition and maintenance of the Equipment, to be solely responsible for:

4.1.15.1 regularly checking and adjusting as necessary the radiator, battery and engine fluid and hydraulic levels;

4.1.15.2 regularly cleaning the exterior, interior and upholstery of the Equipment;

4.1.15.3 replacing any shattered, broken or splintered windscreens or windows.

4.1.16 to indemnify SGM against all fines, penalties and liabilities incurred in respect of any non compliance with or contravention of any transport, traffic or other law or regulation, together with any costs, losses or expense relating thereto incurred by SGM;

4.1.17 not to take or allow any of the Equipment to be taken out of the United Kingdom mainland without receiving SGM’s prior written consent and, in the event of that consent being given, only on such terms as SGM deems fit;

4.1.18 to bear the cost of the repair or rectification of any damage to the Equipment arising from negligence or improper use of the Equipment by the Hirer or any person permitted by the Hirer to use the Equipment; and

4.1.19 to notify SGM of any change in the Hirer’s address and upon request by SGM to promptly inform SGM of the whereabouts of the Equipment.

5. OWNERSHIP, RISK & INSURANCE

5.1 The Hirer acknowledges that the Equipment shall remain the property of SGM and that the Hirer will have no right or interest therein otherwise than as Hirer (and that subject to condition 9 of these Conditions of Hire which itself prevents any certainty of quite possession) and shall at no time do or permit to be done any act or thing which might prejudice or jeopardise SGM’s rights in and to the Equipment. Without prejudice to the foregoing generality, the Hirer will not sell or offer for sale, exchange, assign, mortgage, pledge or lend out the Equipment or in any way part with the Equipment or any interest therein but shall keep the Equipment in the Hirer’s own legal and physical possession and under its control and shall prevent the creation of any charge or lien thereon (provided that the Hirer may temporarily part with possession of the Equipment for maintenance and repairs by an Authorised Repairer).

5.2 All replacement parts and all additions to the Equipment shall also be the property of SGM.

5.3 The risk of damage or destruction shall pass to the Hirer on delivery of the Equipment and the Hirer will be liable for and shall indemnify SGM in respect of any loss, theft or destruction of, or damage (fair wear and tear excepted) to, the Equipment however caused during the Period of Hire.

5.4 The Hirer shall be solely responsible for and shall indemnify SGM against all claims, demands, liabilities, losses, damages, costs and expenses suffered or incurred by SGM as a result of

5.4.1 the negligence of the Hirer or its employees or agents; and/or

5.4.2 any accident involving the Equipment (but under exception of any liability SGM in respect of death or personal injury resulting from the negligence of SGM or its employees or agents).

5.5 Unless otherwise agreed in writing by SGM, the Hirer shall during the Period of Hire insure and keep insured at the Hirer’s expense with insurers and on terms approved by SGM:

5.5.1 the Equipment against all usual risks – including but not limited to accidental damage - for the full replacement value of the Equipment; and

5.5.2 the Hirer and SGM for at least £2,000,000 in respect of any liability to others for loss or damage caused by the Equipment or the operation/use thereof (including without limitation injury, death, disease or physical damage or loss of persons or property).

5.6 The Hirer agrees that SGM may contact the Hirer’s insurers or brokers to confirm that the Hirer has complied with the provisions of this Condition and authorises the Hirer’s insurers or brokers to disclose all relevant information to SGM.

5.7 If the Hirer fails to insure in accordance with this Condition SGM will be entitled (but not bound) to do so and the Hirer will indemnify SGM on demand in respect of all costs and expenses (including premiums) incurred.

5.8 The Hirer will have the interest of SGM noted on the Hirer’s insurance policies and will upon request by SGM at any time produce to SGM every such policy and a receipt for the current year’s premiums.

5.9 The Hirer shall immediately advise SGM of any damage to or accident involving the Equipment and shall subject to Condition 4.1.9 promptly reinstate, replace or repair the Equipment which is damaged or destroyed and shall continue to pay the Hire Payments in respect of such Equipment during such reinstatement or repair.

5.10 Whether or not the damage results in a total loss of the Equipment, the Hirer will if SGM so requests assign to SGM all of its rights and claims under the insurance policy and, by entering the Contract, the Hirer, irrevocably appoints SGM to be the Hirer’s sole agent to receive all insurance proceeds and to negotiate with the insurers in respect of the claim provided that any insurance proceeds received by SGM for damage which is not a total loss will, on receipt by SGM of evidence that the repairs to the goods have been completed, be applied by SGM firstly in or towards any amounts for the time being due by the Hirer to SGM and secondly towards reimbursement of the Hirer for the costs of such repair.

5.11 If the Equipment is lost, stolen, destroyed or so damaged that in the insurers’ or SGM’s opinion the Equipment cannot be economically repaired or replaced, the Contract will terminate automatically and the Hirer will pay SGM (i) the insurance proceeds, (ii) any amount deducted by the insurers by way of excess or in respect of damage caused prior to the date of the insured loss and (iii) the Early Termination payment.

6. LIMITATION OF WARRANTIES RELATING TO THE EQUIPMENT

6.1 If the Contract is a consumer contract and the Hirer is dealing as a consumer, nothing in the Contract will affect the Hirer’s statutory rights as a consumer. Where the Hirer is a local authority the Hirer warrants that it has the power to enter into the Contract and take the Equipment on hire and is entering the Contract for the purpose of and in discharge of its proper functions.

6.2 The Hirer expressly acknowledges that (i) SGM is not the original manufacturer nor the supplier of the Equipment, (ii) the Hirer is not hiring the Equipment on the basis of any condition or warranty express, implied or statutory or representation from SGM in connection with the fitness for any purpose or quality or age of the Equipment and (iii) the Equipment has been selected by the Hirer as suitable for its purpose and the Hirer has relied upon his own skill and judgment in selecting the Equipment. The Hirer accordingly agrees and acknowledges that no condition, warranty or representation of any kind has been or is given or made by SGM, its servants or agents in respect of the Equipment and that all other conditions, warranties or representations, express or implied, statutory or otherwise as to the state, quality, description or otherwise of the Equipment or as to its fitness for any purposes are hereby expressly excluded. The Hirer will not therefore be entitled to any rebate of Hire Payments in respect of any period during which the Equipment is not in the Hirer’s possession because it is out of order or unusable and SGM will not be liable to provide the Hirer with any replacement equipment or parts.

6.3 The Hirer agrees that SGM will not be liable for any liability, claim, loss, damage or expense of any kind or nature caused directly or indirectly by the Equipment or any part thereof or for any inadequacy thereof for any purpose or for any deficiency or defect therein or in the use or performance thereof, or for any interruption or loss of service or use thereof, or for any loss of business or other consequential loss whatsoever and howsoever caused provided that nothing herein shall exclude any liability of SGM in respect of death or personal injury resulting from the negligence of SGM or its employees or agents.

7. TAX MATTERS/ADJUSTMENT TO HIRE PAYMENTS

7.1 For the purposes of UK taxation and irrespective of the accounting treatment adopted, the Hirer is not entitled to claim capital allowances on any expenditure incurred in respect of the Equipment.

7.2 The Hirer Shall:

7.2.1 use the Equipment for a qualifying purpose within the meaning of s.122 of the Capital Allowances Act 2001 throughout the Period of Hire and for no other purpose; and

7.2.2 give SGM immediate written notice of any event or circumstance which may affect SGM’s entitlement to capital allowances.

8. ASSIGNATION

The Contract may be assigned by SGM but is not assignable by the Hirer except with the prior written agreement of SGM. Any assignee of SGM may also make subsequent assignations of the Contract. All assignees will enjoy the benefits of the rights and interest of SGM as if that assignees had been named in the Contract in place of SGM.

9. TERMINATION, RECALL & OF EQUIPMENT

Termination

9.1 Provided the Hirer is not in default of any of its obligations under the Contract, the Hirer will be entitled to terminate the Contract at any time during the Period of Hire by giving SGM not less than twenty-eight days’ notice in writing to that effect and the Hirer must comply with its obligations in the Contract particularly but not limited to those in condition 9.3.

9.2 SGM may at any time terminate the Contract by giving written notice to the Hirer if:-

9.2.1 the Hirer commits any breach of the Contract and (if capable of remedy) fails to remedy the breach within seven days after being required by written notice to do so; or

9.2.2 the Hirer goes into liquidation; or

9.2.3 the Hirer becomes bankrupt or apparently insolvent; or any petition is presented or any other step is taken for the appointment of an administrator to the Hirer; or notice of intention to appoint an administrator is received; or an application is made for an administration order; or

9.2.4 the Hirer makes a voluntary arrangement with its creditors; or

9.2.5 the Hirer has a receiver or administrator appointed; or

9.2.6 the Hirer ceases or threatens to cease to carry on business or has any diligence effected against it or against the Equipment and that diligence is not discharged within fourteen days; or

9.2.7 any of the events (or any event similar to or analogous to, or having a similar effect as those) referred to in clasue10.2.2 to 10.2.5 (inclusive) occurs in any jurisdiction to which the Hirer may be subject;

9.2.8 the Hirer is a local authority on the occurrence of any of the following events:

9.2.8.1 the Contract or any payment obligations under it being or becoming for any reason invalid, void, voidable or otherwise unenforceable; or

9.2.8.2 all or any material part of the assets of the Hirer being transferred to or devolving upon another entity that is not acceptable to SGM or its assignees (using their usual credit underwriting criteria); or

9.2.8.3 the Hirer ceases to carry on a material part of its activities; or

9.2.8.4 the Hirer is dissolved or deconstituted or if there are any proceedings or actions taken due to its insolvency.

9.3 Upon termination of the Contract the Hirer will no longer be in lawful possession of the Equipment with the consent of SGM and will:-

9.3.1 at the Hirer’s expense deliver the Equipment to SGM in good working order and condition (fair wear and tear excepted) and shall meet the costs of replacing any non-genuine parts or rectifying any substandard repairs carried out by parties other than Authorised Repairers; if the Hirer fails to deliver the Equipment within a reasonable time of being requested so to do by SGM, SGM may without any notice retake possession of such Equipment and for this purpose shall be entitled to enter into and upon any land or premises occupied by the Hirer or under the control of the Hirer and the Hirer hereby authorises such access.

9.3.2 be solely responsible for ensuring the safekeeping, supervision and custody of the Equipment until it is delivered to or repossessed by SGM;

9.3.3 without prejudice to any right of SGM to claim damages, become immediately liable to pay to SGM an amount comprising the aggregate of:-

9.3.3.1 any costs and expenses incurred (including legal fees and expenses on a full indemnity basis) by SGM in locating, repossessing, recovering or restoring the Equipment or collecting any payments due under this Contract or otherwise in obtaining the Hirer’s due performance of the obligations hereunder; and

9.3.3.2 interest at the Default Rate – both after and before any decree – on the sum due under Condition 9.3.3.1.

Recall

9.4 SGM may by immediate notice recall the Equipment if, at its absolute discretion, it is in SGM’s interest to do so. SGM will (once the Hirer has complied with the remainder of this clause 9.4, and subject always to the Hirer not being in breach of the Contract) pay to the Hirer a recall payment equivalent to one week’s rental for every three months of the Period of Hire which remains. Upon recall by SGM the Hirer will no longer be in lawful possession of the Equipment with the consent of SGM and will:-

9.4.1 at SGM’s expense deliver the Equipment to SGM in good working order and condition (fair wear and tear excepted) and shall meet the costs of replacing any non-genuine parts or rectifying any substandard repairs carried out by parties other than Authorised Repairers; if the Hirer fails to deliver the Equipment within a reasonable time of being requested so to do by SGM, SGM may without any notice retake possession of such Equipment and for this purpose shall be entitled to enter into and upon any land or premises occupied by the Hirer or under the control of the Hirer and the Hirer hereby authorises such access.

9.4.2 be solely responsible for ensuring the safekeeping, supervision and custody of the Equipment until it is delivered to or repossessed by SGM;

9.4.3 without prejudice to any right of SGM to claim damages, become immediately liable to pay to SGM an amount comprising the aggregate of:-

9.4.3.1 any costs and expenses incurred (including legal fees and expenses on a full indemnity basis) by SGM in locating, repossessing, recovering or restoring the Equipment or collecting any payments due under this Contract or otherwise in obtaining the Hirer’s due performance of the obligations hereunder; and

9.4.3.2 interest at the Default Rate – both after and before any decree – on the sum due under Condition 9..3.1.

Change of Equipment

9.5 SGM may by immediate notice change the Equipment if, at its absolute discretion, it is in SGM’s interest to do so. Upon such change by SGM, SGM will deliver replacement Equipment and the Hirer will no longer be in lawful possession of the Equipment with the consent of SGM and will:-

9.5.1 at SGM’s expense deliver the Equipment to SGM in good working order and condition (fair wear and tear excepted) and shall meet the costs of replacing any non-genuine parts or rectifying any substandard repairs carried out by parties other than Authorised Repairers; if the Hirer fails to deliver the Equipment within a reasonable time of being requested so to do by SGM, SGM may without any notice retake possession of such Equipment and for this purpose shall be entitled to enter into and upon any land or premises occupied by the Hirer or under the control of the Hirer and the Hirer hereby authorises such access.

9.5.2 be solely responsible for ensuring the safekeeping, supervision and custody of the Equipment until it is delivered to or repossessed by SGM;

9.5.3 without prejudice to any right of SGM to claim damages, become immediately liable to pay to SGM an amount comprising the aggregate of:-

9.5.3.1 any costs and expenses incurred (including legal fees and expenses on a full indemnity basis) by SGM in locating, repossessing, recovering or restoring the Equipment or collecting any payments due under this Contract or otherwise in obtaining the Hirer’s due performance of the obligations hereunder; and

9.5.3.2 interest at the Default Rate – both after and before any decree – on the sum due under Condition 9..3.1.

10. GENERAL

10.1 If the Hirer incurs any liability (whether liquidated or unliquidated) to SGM, SGM may set off the liability against any sum that would otherwise be due to the Hirer under the Contract.

10.2 Any notice required under the Contract will be properly served if in writing and sent by fax or prepaid letter post or delivered by hand to the addressee’s address shown in the Contract or the last known address of the addressee. Notice will be effective at the time of receipt if sent by fax, 72 hours after posting if sent by prepaid letter post, and at the time of delivery if delivered by hand.

10.3 If the Hirer is more than one person, the Hirer’s obligations are binding on each such person jointly and severally.

10.4 In the negotiations for the Contract, only third parties SGM expressly authorises in writing have authority to act as SGM’s agents.

10.5 The Hirer shall be solely responsible for and fully indemnify SGM against all claims, demands, liabilities, losses, damages, proceedings, costs and expenses (including legal fees and expenses on a full indemnity basis) suffered or incurred by SGM as a result of any breach or default on the part of the Hirer in the discharge of the Hirer’s obligations under the Contract.

10.6 The Contract constitutes the entire agreement between the parties, supersedes any previous agreement or understanding and may not be varied except in writing between the parties. All other terms and conditions, express or implied by statute or otherwise, are excluded to the fullest extent permitted by law.

10.7 No failure or delay by either party in exercising any of its rights under the Contract shall be deemed to be a waiver of that right, and no waiver by either party of any breach of the Contract by the other shall be considered as a waiver of any subsequent breach of the same or any other provision.

10.8 If any provision of the Contract is held by any competent authority to be invalid or unenforceable in whole or in part, the validity of the other provisions of the Contract and the remainder of the provision in question shall not be affected.

10.9 Termination of the Contract shall not affect any accrued rights of the parties subsisting at the date of termination.

10.10 No right or remedy herein conferred upon or reserved to SGM or the Hirer is exclusive of any other right or remedy herein or provided by law but each shall be cumulative of every other right or remedy given hereunder or now or hereafter existing and may be enforced concurrently therewith or from time to time.

Copyright: SGM Contracts LLP - March 2010 Version 2010:1