What is Leasing?

Definition: The act of leasing is a way of financing the purchase of fixed assets which normally have a high cost.

Definition of a Lease

We define lease in order to understand the leasing contract. The lease is a contract whereby one party, the lessor, grants the right to use a particular good for a period of time to the other party, the lessee (or tenant), which will pay for the transfer of the right to use a fixed amount regularly.

Definition of a Leasing Contract

In this contract the landlord transfers the right to use the property in exchange for payment of rents for a specified period after which the tenant can do three things: buying a good value (and low), return the property or extend the leasing period.

Obligations of lessor

• To deliver the goods in proper condition
• Receive payments

Obligations of lessee

• Make payments
• Make choice of whether to acqure ownership of asset at expiration of contract