Dry Hire Vs. Wet Hire – What Do They Mean?

Contents

Are you thinking about hiring out physical equipment, machinery, vehicles or venues?

If so, you’re probably thinking you need a standard hire agreement. We recently covered the basics of hire agreements here.

But, if you’ve done your homework, you might have come across the terms “dry hire” and “wet hire”.

What is the difference between a dry hire and a wet hire?

To know which type of hire is right for you, you will need to ask yourself:

What is included in the hire?
Who is liable for what?

Then, you need to put this down in writing as an agreement – these are called Dry Hire Agreements and Wet Hire Agreements

The Difference Between A Wet Hire And A Dry Hire

If you are offering an excavator for hire, and only the excavator alone, this is a dry hire.

This is because whoever hires the excavator from you is responsible for finding someone else to operate it.

But if you want to make a little more money, you might want to also include your own services in operating that excavator for a customer – this is a wet hire.

Put simply, a dry hire is when you are hiring out machinery, equipment or vehicles alone. Then, the person who hires it is responsible for operating it.

Another example – perhaps you would like to offer your audio-visual (AV) equipment for hire at events.

Under a dry hire, the person who hires it from you is responsible for operating it during their event.

But if the customer also asks you to provide the services and personnel to operate the AV equipment for the event, you have a wet hire.

Wet hires are usually more expensive because they include the rent of the equipment plus your services in operating it.

Whenever you are hiring something out, it’s always a good idea to clarify whether it is a dry or wet hire.

Your next step is putting it down in writing as a legally binding agreement.

What Is A Dry Hire Agreement?

A Dry Hire Agreement will set out the terms and conditions on which a party hires equipment, machinery or vehicles from you.

What is included in your agreement will depend on the products or goods being hired.

You will want to make sure you have all your bases covered – from clearly describing what is included in the hire to detailing payment terms.

What Is A Wet Hire Agreement?

Now – wet hire agreements are a little bit more complicated.

This is because, on top of the equipment on hire, a wet hire includes your services in operating it.

For example, businesses that hire out their AV equipment for events are commonly responsible for operating it during the event.

Or, party suppliers who have large marquees for hire usually deal with the setting up and packing after they have been used.

What’s The Advantage Of A Wet Hire?

Wet hires are safer because you don’t run the risk of letting someone else use your expensive equipment and causing any accidents.

They are common for businesses who rely on the quality and standard of their equipment, and want to avoid as much damage as possible to their products.

From the customer’s view, this puts them at ease because they can hire equipment with reliability and efficiency guaranteed.

However, this means that there is a certain standard required of the person operating the equipment.

You might want to consider what your customers expect from your service and whether you and your employees are qualified to provide it.

Also, it’s a good idea to limit your liabilities in a Wet Hire Agreement because you are the one in control of the equipment.

A good lawyer can help you make sure your Wet Hire Agreement sets out the terms and conditions that best protect you from liability and risk.

Some Examples…

If you are hiring out your AV equipment, generally your services would only include supplying, setting up, operating, maintaining, repairing and packing up the AV equipment.

So, if something goes wrong with the venue, which affects your AV equipment from working, you need to make sure you aren’t responsible.

Which Hire Agreement Is Right For Me?

As mentioned earlier, asking yourself the following questions will help you decide which type of hire agreement you need:

What is included in the hire?
Who is liable for what?

What Is Included In My Hire?

Deciding which type of hire is right for you depends on whether you want to only hire out your equipment, or whether you want to also include your services.

If you would like to include your services in operating the equipment, this is a wet hire.

And you will need a Wet Hire Agreement.

For a dry hire, let’s go back to the example of the excavator.

If you’ve got a spare excavator sitting in your garage, it might seem like a good idea to make a little money and hire it out.

You don’t have time to actually operate the excavator, but you want to avoid risk and liability as much as possible when you hire it to someone else.

This is where a Dry Hire Agreement comes handy.

What Am I Liable For?

Depending on what type of hire you have, you will need to clarify your responsibilities in your relevant agreement.

Let’s go back to the example of the excavator.

Having a Dry Hire Agreement protects your rights and obligations so that you aren’t responsible for any accidents that might happen with the excavator they hire from you.

What happens when someone who operates the excavator they rented from you hurts themselves and decides to sue you?

Or if the excavator does not work properly after it leaves your garage?

And what if something happens to the excavator during the period of hire?

If you are hiring out excavators, tractors, trucks, slashers or any other physical equipment, there is a risk of it being lost, stolen or damaged.

Having a Dry Hire Agreement in good shape keeps your business stress-free from issues that might ruin your business name or heavy expenses in replacing stolen equipment.

This may even be important for when you purchase insurance for your equipment, as insurance companies will want to make sure your liability terms and conditions are set out in writing.

To make sure you’re protected from any disputes or risks, it’s a good idea to seek legal help.

Or, if you own a wedding venue business, your Wet Hire Agreement could include additional services like furnishing, catering, security and sourcing suppliers on top of hiring your venue space.

In your Wet Hire Agreement, you need to set out whether you are responsible for anything your suppliers provide.

So, in a wet hire, it’s important to think about the scope of your services and what you could be liable for.

Get Started

If you’d like assistance getting a Dry Hire Agreement or Wet Hire Agreement together for your business, or would like to chat about what option suits your business needs, we’re here to help!

You can get in touch with our friendly team at Sprintlaw at 1800 730 617 or submit an enquiry here and we’ll get back to you within 1 business day.

Regie Anne Gardoce

Regie is the Legal Transformation Lead at Sprintlaw, with a law degree from UNSW. Regie has previous experience working across law firms and tech startups, and has brought these passions together in her work at Sprintlaw.

Tomoyuki Hachigo

Tomo is the co-founder of Sprintlaw and a commercial lawyer with a broad range of legal experience. Before starting Sprintlaw, he was an M&A lawyer at a top-tier law firm advising businesses of all sizes from large corporates to startups.