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How to Get Out of a Copier Lease

Max Freedman
Max Freedman

Copier leases are notoriously difficult to break, but options exist for exiting the contract. Your first step is to check your copier service agreement.

As with any formal agreement between two parties, copier leases can be excruciatingly difficult to break. This challenge can prove especially frustrating when it comes to copiers, since, like most technology, newer and better copy machines are constantly being introduced. You could find yourself with a machine that doesn't check all the boxes that other devices might. You might also be ready to ditch your lease if your service provider is dropping the ball.

Copier leases and service agreements are typically separate from one another. Additionally, the latter can be easier to modify or cancel than the former. Learn how you can extricate yourself from a copier lease or service agreement.

What is a copier lease?

A copier lease is a formal contract between your business and a company that leases a copier to your business for a predetermined period of time. The lease period typically lasts one to five years, and your business usually has the opportunity to buy the copier at the end of the lease.

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The vast majority of copier leases include language that firmly binds your business to these contracts. Such clauses are important to acknowledge, since they render your contract nearly unbreakable. In other words, if you realize one year into a three-year copier lease that you're not happy with your copier, you're still stuck making monthly payments for two years.

Often, the language within the contract implies that the lessee (your business) cannot get out of the lease due to poor service by the lessor (the company you leased the copier from). However, sometimes, you can get out of a copier service agreement.

What is a copier service agreement?

A copier service agreement is a contract covering the maintenance of your copier, repairs, service calls, supply orders and remote support.

Some copier service agreements exist between your business and a company that is not the same one you leased the copier from. The terms that these other companies set for their agreements are generally easier to break than copier leases. Your ability to get out of your copier service agreement strongly depends on which type of service agreement you have.

Types of service agreements for copiers

Your copier service agreement will fall into one of the two below categories:

  • A combined copier service agreement. Combined agreements are especially tough to escape from. That's because they combine your copier agreement and lease into one contract. Businesses such as multilocation companies that want to simplify their accounts payable  may prefer a combined agreement.

  • A separate copier service agreement. If your copier lease is a fair market value (FMV) lease, you'll need to obtain a separate copier service agreement. That's because FMV leases do not contain clauses regarding service and maintenance. Companies with a small number of locations may face fewer operational obstacles separating their lease from the service agreement.

Notably, in neither case can you cancel your copier lease (well, at least not easily). With combined copier service agreements, merely modifying your arrangement is incredibly difficult, if not impossible. With a separate copier service agreement, you can't change anything about your lease, but you can switch service providers. [Read related article: The History of the Photocopier]

How to get out of a copier service agreement

To get out of your copier service agreement, follow the steps below. We recommend that you always consult with an attorney regarding any decisions you make based on a legally binding agreement.

1. Carefully review your agreement.

Whenever you're looking to cancel a contract of any sort, your first step is to look at the terms and conditions. The contract should clearly state each party's obligations when the contract is canceled. You're likely to see the below three terms in your agreement:

  • Early termination. If you break the contract before its termination date, you may be obligated to pay fees. These fees can be substantial enough to discourage you from canceling the contract.

  • Breach of contract. This clause states what conditions or actions constitute a breach of contract. Usually, these actions are gross misconduct or negligence on the lessor's part. For example, a service provider who consistently fails to show up to scheduled appointments may be in breach of contract.

  • Automatic renewals. Although copier leases only last for a set amount of time, they can spontaneously become longer if you fail to act. That's because many copier agreements include clauses saying that lessees must cancel 30 to 90 days before the lease ends. If you don't cancel by this deadline, the lease automatically renews. Check your lease for this clause so you don't accidentally extend a lease you're not happy with. 

TipTip: Check your lease to see if there is an automatic renewal clause. Many copier agreements automatically renew if the lessee doesn’t cancel wthin 30 or 90 days before the lease ends.

2. Look for an assumption clause.

Assumption clauses can help relieve some of the burden of being stuck with an unsatisfactory agreement, but they're not a way you can opt out of your copier lease. Assumption clauses allow you to sublease your copier to another company that will cover your payments, thus easing your financial woes. However, you're still financially responsible for copier damage beyond what your service agreement covers.

3. See if a competitor will buy out the contract.

Most copier leasing companies buy contracts that other lessors have with lessees like yourself. In doing so, your new lessor rolls your remaining lease debt into a new contract. The result is typically lower payments but longer contracts while you get a newer, higher-quality copier and better service. Think of it as debt refinancing but for copiers.

4. Try to renegotiate the contract's terms.

If none of the above options work, you can see if your lessor is willing to renegotiate your contract. You could ask for lower monthly payments or a fee-free early termination, but don't expect much leeway from the leasing company. There's nothing wrong with seeing if the lessor is willing to renegotiate; copier lessors, though, typically are unwilling to change their terms once you sign the lease.

5. Pay your full lease now.

If you're six months into a 12-month lease that's not working out, maybe you have the cash flow to pay off the rest of your agreement. Doing so is a viable option if you truly want to get out of your lease. However, if your lessor doesn't retake possession of the copier, then you have to figure out what to do with your machine.

6. Speak with a lawyer.

Given all the stipulations in a copier service agreement, you may need a legal expert on your side to free yourself of your obligations to the leasing company. A lawyer can be expensive to hire, but if their fees are less than what you'd pay in the remaining months of your unsatisfactory copier lease, the expense might be worthwhile.

Other tips for getting out of a copier lease

The above methods are the most likely to free you from your copier lease, but getting out of your lease will be immensely challenging no matter which route you go. That's why you should also be sure to do the following as you pursue lease cancelation:

  • Keep a paper trail. Since copier leases are incredibly strict, you'll need a mountain of undeniable evidence on your side to prove breach of contract or renegotiate the terms. On this front, there's nothing wrong with saving and perhaps printing every communication between you and your lessor or service provider. The more material you have with which to make your case, the better you might fare.

  • Account for extra fees. Unless you pay your lease early and keep your copier, you'll need to return your machine to the lessor if you end your contract early. Doing so may require you to pay for shipping and insurance on the copier. Many lessees don't account for these costs and thus pay far more to break a lease than what they initially expected.

  • Find a better alternative. If you do successfully break your copier lease but still need a copy machine for your office, browse our multifunction printers and copier reviews to find a better device for your business. As you do, familiarize yourself with standard copier pricing so you're not in for any surprises.

 

Image Credit: YakobchukOlena / Getty Images
Max Freedman
Max Freedman
business.com Contributing Writer
Max Freedman is a content writer who has written hundreds of articles about small business strategy and operations, with a focus on finance and HR topics. He's also published articles on payroll, small business funding, and content marketing. In addition to covering these business fundamentals, Max also writes about improving company culture, optimizing business social media pages, and choosing appropriate organizational structures for small businesses.