Buried on page 6 of your copier lease is a clause that could save you thousands of dollars or trap you in a contract you cannot escape. The assignment clause determines whether you can transfer your copier lease to another business, and the specific wording matters more than most people realize.
Here is how to find it, read it, and use it to your advantage.
What the Assignment Clause Actually Says
Most copier lease assignment clauses fall into one of three categories. The permissive version reads: “Lessee may assign this lease with the prior written consent of Lessor, which consent shall not be unreasonably withheld.” This is the most favorable language. It means the leasing company must approve the transfer, but they cannot say no without a legitimate reason (like the new lessee failing a credit check).
The restrictive version reads: “Lessee may not assign, sublease, or transfer this lease or any interest herein without the prior written consent of Lessor in its sole discretion.” The phrase “sole discretion” is the problem. It means the leasing company can deny your transfer request for any reason or no reason at all.
The prohibited version reads: “This lease may not be assigned by Lessee under any circumstances.” This is rare in copier leasing but does appear in some contracts. If your lease contains this language, assignment is not an option without renegotiating the lease terms.
How to Actually Use the Assignment Clause
If your lease permits assignment (even with consent required), the process involves four steps. First, find a qualified assignee (a business willing to take over your lease and your copier). Second, submit a formal assignment request to the leasing company with the assignee’s credit information. Third, complete the assignment paperwork, which typically includes a new credit application, an assignment agreement, and potentially a new personal guarantee from the assignee. Fourth, obtain a written release confirming that you are no longer liable under the lease.
The entire process takes 2 to 6 weeks, depending on the leasing company’s responsiveness and the assignee’s credit profile.
When the Leasing Company Says No
If the leasing company denies your assignment request and your clause says consent “shall not be unreasonably withheld,” you have the right to challenge the denial. Ask for a written explanation. If the reason is the assignee’s credit, address the credit concern (perhaps through a larger security deposit or co-signer). If the reason is vague or seems unreasonable, point to the contract language and push back.
In practice, most denial disputes are resolved through negotiation rather than litigation. The leasing company does not want the cost and hassle of a court fight over a copier lease. They want reasonable assurance that the new lessee will make payments.
The Personal Guarantee Trap in Assignments
Here is where many business owners get burned: they successfully assign the lease to a new business, but the leasing company keeps them on the hook as a guarantor. The assignment transfers the lessee’s obligations, but the personal guarantee is a separate agreement that does not automatically transfer.
You must specifically negotiate a release of your personal guarantee as part of the assignment. Do not sign the assignment paperwork until you have a written confirmation that your guarantee is being released. Some leasing companies will try to keep you as a backup guarantor. Do not accept this arrangement.
What Most Guides Miss: Assignment as a Negotiating Tool
Even if you do not actually want to assign your lease, the assignment clause gives you negotiating leverage. If you are trying to negotiate an early buyout and the leasing company is not offering favorable terms, mention that you are exploring assignment as an alternative.
This changes the leasing company’s calculation. If you assign the lease, they get a new lessee they did not choose, potential credit risk, and administrative costs. If they give you a reasonable buyout, they get immediate cash and eliminate future risk. Many leasing companies offer better buyout terms once they realize assignment is a real alternative. See how assignment interacts with other contract terms in our fine print guide, and learn about all your exit options at our getting out of a copier lease guide.
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