Restrictions on Use of Equipment
A lease arrangement may impose certain restrictions on use of the equipment, acquiring compulsory insurance and so on. Besides the lessee is not free to make additions or alterations to the leased asset to suit his requirement.
Limitations of Financial Lease
A financial lease may entail a higher payout obligation if the equipment is not found to he useful and the lessee opts for premature termination of the lease agree ides, that is not entitled to the protection of express or implied warranties while he is not the owner of the asset.
Consequence of Default
If the lessee defaults in complying with any terms and conditions of the contract, the lessor may alternate the lease and take over till possession of the leased asset. In case of finance may be required to pay for damages and accelerated rental payments.