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Customer enters into a contract with an aircraft owner for the use of an explicitly specified...

Customer enters into a contract with an aircraft owner for the use of an explicitly specified aircraft for a two year period. The contract details the interior and exterior specifications for the aircraft. Is this contract containing a lease and why?

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Answer #1

Answer:

Lease is a special type of contract where the Lessor gives permission to the Lessee to own and use some specific assets for a specified period in consideration of some amount known as the Lease Rentals. There are certain Features and characteristics of a lease contract.

The lease contract should contain the details of the two parties, The term of the contract or the lease term, Type of the Lease, Lease Rentals, Residual value at the end of lease term and also the specification of the assets.

In the given case study we can see that the only about the interior and exterior of the Aircraft is mentioned in detailed in the contract, It misses out with the essentials of a Lease contract. So, we can say that this is not a lease contract.

Thank You...!

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