UNIDROIT Convention on International Financial Leasing
- Type: Convention
- Date of signature: 28/05/1988
- Place of signature: Ottawa, Canada
- Depositary: Government of Canada
- Date of entry into force: 01/05/1995
What is it about?
Leasing is a way of financing assets that is widely used throughout the world today. It consists for one party (the lessor) in acquiring assets from one or more suppliers on the instructions of another party (the lessee) and in granting to the lessee the use, but not the ownership, of these assets for an agreed length of time in return for the payment of the agreed rentals. The lessor also grants to the lessee the option to buy the assets at the close of the leasing period for a residual price including rentals paid. This Convention is designed to remove legal impediments to the international financial leasing of equipment. The provisions are taken largely from the internal laws of a majority of States and address care of equipment, late delivery, unpaid rentals and interest as well as breach of contract.
Why is it relevant?
The Convention removes certain legal impediments to the international financial leasing of equipment, while maintaining a fair balance of interests between the different parties to the transaction. It encourages international leasing and international trade.
A Contracting State may declare at the time of ratification that it will substitute its domestic law if its domestic law does not permit the lessor to exclude its liability for its default or negligence.