Legal Question in Business Law in Texas

Re: rental items

Unfortunately, liability can run to all parties in the stream of commerce, including the rental company. This is part of the general theory of "products liability" and "strict products liability" law. These are not, however, the only theories of legal liability that may apply to the rental operator (for instance, an express or implied warranty may apply, and/or the rental operator may bear an implied "duty to warn" of known defects, an implied "duty to inspect" the equipment, and/or an implied "duty to instruct" as to the safe and proper use of the equipment).

Fortunately (perhaps), warranty waivers and "customer misuse" are valid defenses to many of the above types of claims, but they will hinge to a large extent on how well your rental contract is written.

For example, certain contract clauses can dramatically reduce the rental operator's potential liability. Such clauses would include waivers of express and implied warranties; a customer's agreement to indemnify and hold harmless the rental operator; the customer's acknowledgement of receipt of all necessary training and instructions; his/her agreement to comply with the user manual, any applicable OSHA and/or ANSI standards and all applicable laws; the customer's acknowledgement of his/her familiarity with both the machine and the means of operating it safely; and finally, the customer's acknowledgement of his/her performance of his/her own inspection prior to renting the item.

The American Rental Association ("ARA") offers a book on rental contract writing that you may find helpful. I authored it, and the ARA makes it available to both members and non-members. You can find it by going to www.ARArental.org. The book is entitied: "Business Management - Contracts and Legal Guidelines."

Best of luck.