A lease agreement is a contract between two parties, the lessor and the lessee. The lessor is the legal owner of the asset, the lessee obtains the right to use the asset in return for regular rental payments. The lessee also agrees to abide by various conditions regarding their use of the property or equipment. For example, a person leasing a car may agree that the car will only be used for personal use.

All kinds of personal property (e.g. cars and furniture) or real property (e.g. raw land, apartments, single family homes, and business property (including wholesale and retail)) may be leased. As a result of the lease, the owner (lessor) grants the use of the stated property to the lessee.

Common elements of a lease agreement include:

• The starting date and duration of the agreement.
• Identifies the specific object (by street address, VIN, or make/model, serial number) being leased.
• Provides conditions for renewal or non-renewal.
• Has a specific consideration (a lump sum, or periodic payments) for granting the use of this object.
• Has provisions for a security deposit and terms for its return.
• May have a specific list of conditions, which are therein described as Default Conditions and specific Remedies.

The lease agreement may have other specific conditions placed upon the parties such as:

• Need to provide insurance for loss.
• Restrictive use.
• Which party is responsible for maintenance.
• Termination clause (describing what will happen if the contract is ended early or cancelled, stating the rights of parties to terminate the lease, and their obligations).