Business Law Term Paper Rent a Car Contract

Topics: Automobile, Insurance, Renting Pages: 18 (6382 words) Published: February 1, 2011
Term Paper

Rent-a-Car Contract

ADM 3360A

Andrew Sarofeim


December 7, 2010


With the ability to fly anywhere around the world at a relatively affordable price, many Canadians are finding themselves taking trips to visit family, friends, or complete strangers more often than ever before. However, the ability to travel in a given destination of choice will require the ability to drive a car. This has created a large demand for cars that can be rented, hence the large amount of rent-a-car locations being created all around the world. In order to rent a car in a given travel destination, consumers must abide by a very strict contract that consumers must agree to.

However, if the consumer does not fully understand the contract and signs in blindly, the consumer holds a very high risk of paying a lot more then the advertised price of a specific vehicle. A consumer who has the mentality of treating the rented car like his or her own car will be severely punished because the contract for renting a car explicitly states how the car can or cannot be used. For example, the Enterprise rent-a-car contract states that “Vehicle shall not be driven on an unpaved road or off-road”[1] A consumer who signs the rent a car agreement without reading the contract may drive it off-road and end up paying a large penalty fee for doing so as a result of negligence. It is up to the consumer to fully read and understand the rent-a-car agreement to avoid any easily avoidable charges that may arise as a result of operating the vehicle.

This paper will discuss the contract between the consumer and the rent-a-car business. More specifically, it will focus on the Enterprise Rent-a-Car contract that consumers must sign in order to rent a car. Step-by-step, the paper will describe all the clauses of the contract with an explanation to each clause, applying legal principles to the agreement, recommendations for what the Cardholder and the bank can do, lessons learned from the agreement, and legal corrective measures with provisions dealing with the contract. The objective of the paper is to get a better understanding of the agreement. By breaking down each part of the agreement to its finest terms, the clauses will be easier for the car renter to understand.

Description and Explanation of the Clauses in the Contract

Clause 1 – Definition
A – In order for the contract to be less redundant and easier for the consumer to read through the contract, sub clause A defines what an additional authorized driver for the purpose of the Enterprise Rent-a-Car contract B- For the sake of the contract, the term owner used in the contract refers to the primary driver who will be driving the rented car. C-Rental period refers to the time the car leaves the premise of the owner until the car is returned back to the owners premise. D-Renter refers to the individual who has put their name on page 1 on the contract as a renter. E-The term vehicle refers to the vehicle rented by the consumer. If for whatever reason the owner replaces the vehicle with another one, the replacement vehicle will still be considered a vehicle for the sake of simplicity to explain the contract. Clause 2 – Ownership/Vehicle Condition/Warranty Exclusion

There are a few sections of this clause that must be explained. Essentially, part one explains that any accessories that are included in the contract are considered to be owned by the owner, and not third parties.

Part two explains that the vehicle was in good working condition when it was picked up by the owner. It goes further by explaining that the consumer has had adequate time to inspect the car, and that once the vehicle leaves the premise of the owner, the consumer has accepted the car as is. Also, the contract states that original wear and tear is expected. This protects consumers from paying for unnecessary fees because of normal wear...
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