A stand down rate is an optional clause in a Hire Agreement that allows parties to offer a discount on days when the rented product will not be utilised. In 2025, this clause is increasingly relevant as businesses aim to provide flexible pricing while maintaining transparent terms.
‘Stand down rates’ are most commonly found in Dry Hire Agreements, where large, expensive machinery is rented out. With industry trends evolving this year, incorporating such clauses is becoming standard practice to cater to varying usage patterns and enhance customer appeal.
For example, if your business is hiring out machinery for a construction site for a month, and the customer anticipates that work will not be undertaken on weekends or recognised public holidays, you might charge them 50% of the standard hire rate on those days. This approach not only provides cost relief but also builds trust through clear, transparent pricing.
Another example is when equipment is only suitable for use under specific conditions-if adverse weather renders it unusable, the affected days can be billed at a discounted ‘stand down rate’. This flexibility is essential in the fluctuating market conditions of 2025 and ensures that both parties benefit during periods of non-usage.
In addition, integrating stand down rates into your agreement helps clarify expectations and can complement other contractual provisions, such as contract drafting and force majeure clauses. These measures ensure your hire agreements remain robust and aligned with current market practices, ultimately making your business more competitive and appealing.
Why Should You Include Stand Down Rates in Your Agreement?
Building ‘stand down rates’ into your hire agreement can make your business more attractive to customers, encouraging long-term commitments and repeat business. This strategy demonstrates flexibility in pricing and helps manage expectations during periods of non-usage, thereby safeguarding your revenue while offering fair value to your clients.
Here at Sprintlaw, our lawyers are highly experienced in drafting both Wet and Dry Hire Agreements tailored to your business’s specific needs. If you require assistance customising your contract to include stand down rates and other vital clauses, why not explore our contract drafting services? Contact us today for a quote for your contract!
Our friendly legal consultants are available for a free chat on 1800 730 617 or at team@sprintlaw.com.au.
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