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If you wish to hire out your equipment to a third party, you should use a dry hire agreement. This means that you are letting the third party hire and operate your equipment themselves. You could also provide the personnel to operate the equipment. This is known as a wet hire agreement instead. Wet and dry hire agreements have different terms. The type of hire agreement you use will often depend on what kind of equipment you are hiring out. This article will outline some important clauses to include in your dry hire agreement including:

  • condition of equipment;
  • liability;
  • maintenance of equipment;
  • payment and delivery; and
  • registering your security interest on the PPSR.

Important Clauses for Your Dry Hire Agreement

Condition of Equipment

In your dry hire agreement, you should include a description of the condition of your equipment at the time of its initial hiring. This way, if any damage occurs during the period of its hire, it is easy to confirm that it happened while it was in the hiree’s possession.


It is also important to include who is responsible for fixing the equipment if damage does occur. You should also outline who should cover the costs of repairing the equipment. Usually, this would be the hiree, and you may wish to outline the kinds of services they can access to fix the equipment.

Maintenance of Equipment

If the equipment you hire out requires specific storing conditions or other maintenance concerns, then it is a good idea to outline these in your dry hire agreement. This means that the hiree agrees to follow the rules of upkeep for your equipment.

For example, if a vehicle you hire out needs regular servicing, you would put this in your agreement and require the hiree to take it to get serviced.

Usage of Equipment

If you are hiring specific equipment that requires a licence, like a forklift licence, it is a good idea to include a term in your agreement outlining that only people with this licence can use your equipment. This covers you if the hiree allows someone unqualified to use your equipment.

It is also important to set out specific risks that are involved with using your equipment if there is a specialised danger in the process. This way, the hiree is aware of the risks and they are liable if they do not follow the rules that you have set out.

Payment and Delivery of Equipment

In your dry hire agreement, you should outline how you are charging for the use and operation of your hire equipment, as well as the period that you are hiring it out if this is for a fixed amount of time.

This also includes how the equipment gets to the hiree. Here, you need to specify:

  • whether they are picking it up; 
  • if are you delivering it; and
  • what the delivery date is.

When the hiring period begins, you also need to specify whether:

  • they in possession of the equipment during its delivery time; or
  • you are still in control of the equipment.

This is important if something goes wrong, as who is in control of the equipment may determine who is responsible for any damage.

Registration on the PPSR

In some circumstances, you may be hiring out your equipment for longer than a year or for an indefinite period of time. In that case, you should include a clause in the agreement notifying the hiree of your security interest on your property. The PPSR is the Personal Properties Securities Register, an online database which registers security interests in personal property. When you hire out your property, it is a good idea that you register your security interest on the PPSR as the hirer. This is useful if something goes wrong, for example:

  • the hiree is unable to pay for the equipment; or
  • your equipment is damaged and they cannot repair it.

Registering your security interest on the PPSR means that it is much easier to claim back your property if any of these situations arise. Your dry hire agreement should have a clause declaring this security interest, and you will also have to file a financing change statement on the PPSR website.

The dry hire agreement needs to notify the hiree that you are doing so, as well as inform them what information of theirs you need for your financing statement. This includes their:

  • name;
  • date of birth;
  • address; and 
  • a description of the property they are hiring.

Key Takeaways

It is crucial to have a comprehensive hire agreement to reduce risk when hiring out any equipment of yours. If you outline what exactly your obligations are, and the hirees, it is easier to point to these obligations in the agreement if something were to go wrong. This means you can avoid disputes later on, and any legal costs. If you would like more information or help with your dry hire agreement, contact LegalVision’s contract lawyers on 0800 005 570 or fill out the form on this page.


What does dry hire mean?

Dry hire is a kind of hire agreement. This means that you are providing equipment for someone to hire, without an operator to run the equipment.

What is the difference between a wet and dry hire agreement?

When you hire out your personal property or equipment, you should draft up a hire agreement outlining this process. A dry hire agreement is when you just hire out the equipment itself. A wet hire agreement is when you provide an operator as well as the equipment.

What should be in my dry hire agreement?

You should detail the condition of the equipment you are hiring out, as well as what happens if your equipment is damaged. It is also important to include terms covering your liabilities, and register your security interest in the equipment.

What is a security interest?

You can register a security interest on your property through the Personal Properties Securities Register. This means that you have a vested interest in the property, and anyone can see that if they look up your property on the register.

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