CLFP - Equipment Lease and Financing Documentation Exam
2026|2027 Questions with Detailed Verified Answers (100%
Correct Answers) | Already Graded A+
What is Vicarious Liability? - Answer -Cases in which a mishap with the equipment results in the
lessor as being named as a defendant in actions arising out of such injuries.
With respect to documentation, what is Loss & Damage? - Answer -A key element of a lease
agreement that provides for the obligation of the lessee to the lessor if some or all of the
equipment is destroyed and provides that the equipment will either be repaired or replaced
sufficient payment will be made to lessor to satisfy the lease ( i.e. make whole).
With respect to documenation, what is Taxes, Liens? - Answer -A key element of a lease
agreement that specifies that the lessee is responsible for any and all taxes imposes on the
possession and use of the equipment. Should specify the method taxes should be paid. Should
also specify lessee requirement to keep equipment free of liens
With respect to documentation, what is Lessee Indemnification of Lessor? - Answer -A key
element of a lease agreement that set for that lessee will indemnify, or hold harmless, any claim
made by a third party related to leased equipment.
With respect to documentation, what is Lessor Assignment, Waiver of Defenses Clause? -
Answer -1.) A key element of a lease agreement that provides the lessor permission to assign a
lease to a third party without notice to lessee
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,2.) Waiver of Defense states that any defense of collections must be assigned to the original
lessor
With respect to documentation what is Service Charges/Late Fees? - Answer -A key element of a
lease agreement that clearly spells out the charge imposed on late payments. Typically defines a
specified "grace period".
Late fees should be reasonable and cover cost. If construed as a penalty or bolster return, it may
be unenforcable
With respect to documentation, what is Time is of the Essence? - Answer -A key element of a
lease agreement that indicates that all payments are other contract performance must be
completed in a timely manner. Should also include language that "time is of essence"
throughout the lease even if late payments are accepted earlier in the lease.
With respect to documentation, what is Default Provisions? - Answer -A key element of a lease
agreement that sets forth events that are deemed to be a "default" triggering remedies
including
1.) failure to pay when due
2.) failure to pay other amounts due
3.) failure to meet non monetary requirements
4.) Equipment events (destroy, damage, moved etc.)
5.) lessee false statements
6.) financial covenants
7.) death
8.) bankruptcy
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, With respect to documentation, what are Remedies? - Answer -A key element of a lease
agreement these specify remedies in the event of default. Remedy language should be worded
as 'cumulative' meaning one or more can be done. Examples
1.) return of equipment
2.) Cancel or terminate lease
3.) Accelerate payments
4.) payments of damages by formula (best in repo only)
With respect to documentation, what is Cross Default Clause? - Answer -A key element of a
lease agreement provides language that allows a lessor to default one or all of the leases with a
single lessee when when one lease defaults.
With respect to documentation, what is Provision Regarding Multiple Lessees? - Answer -A key
element of a lease agreement that provides that liability is "join and several" which means that
all co lessees are equally responsible . This prevents solvent parties from not paying when non-
solvent parties do not pay.
With respect to documentation, what is Attorney's Fees/Enforcement Fees? - Answer -A key
element of a lease agreement that states enforcement fees are only recoverable if agreeable by
both parties. May also state these fees are recoverable by "prevailing party".
With respect to documentation, what is Severability? - Answer -A key element of a lease
agreement that states that if a particular part of the agreement is not found enforceable, all
other parts of the lease are still enforceable. Avoids the danger of an entire document being
found unenforceable
3|Page
2026|2027 Questions with Detailed Verified Answers (100%
Correct Answers) | Already Graded A+
What is Vicarious Liability? - Answer -Cases in which a mishap with the equipment results in the
lessor as being named as a defendant in actions arising out of such injuries.
With respect to documentation, what is Loss & Damage? - Answer -A key element of a lease
agreement that provides for the obligation of the lessee to the lessor if some or all of the
equipment is destroyed and provides that the equipment will either be repaired or replaced
sufficient payment will be made to lessor to satisfy the lease ( i.e. make whole).
With respect to documenation, what is Taxes, Liens? - Answer -A key element of a lease
agreement that specifies that the lessee is responsible for any and all taxes imposes on the
possession and use of the equipment. Should specify the method taxes should be paid. Should
also specify lessee requirement to keep equipment free of liens
With respect to documentation, what is Lessee Indemnification of Lessor? - Answer -A key
element of a lease agreement that set for that lessee will indemnify, or hold harmless, any claim
made by a third party related to leased equipment.
With respect to documentation, what is Lessor Assignment, Waiver of Defenses Clause? -
Answer -1.) A key element of a lease agreement that provides the lessor permission to assign a
lease to a third party without notice to lessee
1|Page
,2.) Waiver of Defense states that any defense of collections must be assigned to the original
lessor
With respect to documentation what is Service Charges/Late Fees? - Answer -A key element of a
lease agreement that clearly spells out the charge imposed on late payments. Typically defines a
specified "grace period".
Late fees should be reasonable and cover cost. If construed as a penalty or bolster return, it may
be unenforcable
With respect to documentation, what is Time is of the Essence? - Answer -A key element of a
lease agreement that indicates that all payments are other contract performance must be
completed in a timely manner. Should also include language that "time is of essence"
throughout the lease even if late payments are accepted earlier in the lease.
With respect to documentation, what is Default Provisions? - Answer -A key element of a lease
agreement that sets forth events that are deemed to be a "default" triggering remedies
including
1.) failure to pay when due
2.) failure to pay other amounts due
3.) failure to meet non monetary requirements
4.) Equipment events (destroy, damage, moved etc.)
5.) lessee false statements
6.) financial covenants
7.) death
8.) bankruptcy
2|Page
, With respect to documentation, what are Remedies? - Answer -A key element of a lease
agreement these specify remedies in the event of default. Remedy language should be worded
as 'cumulative' meaning one or more can be done. Examples
1.) return of equipment
2.) Cancel or terminate lease
3.) Accelerate payments
4.) payments of damages by formula (best in repo only)
With respect to documentation, what is Cross Default Clause? - Answer -A key element of a
lease agreement provides language that allows a lessor to default one or all of the leases with a
single lessee when when one lease defaults.
With respect to documentation, what is Provision Regarding Multiple Lessees? - Answer -A key
element of a lease agreement that provides that liability is "join and several" which means that
all co lessees are equally responsible . This prevents solvent parties from not paying when non-
solvent parties do not pay.
With respect to documentation, what is Attorney's Fees/Enforcement Fees? - Answer -A key
element of a lease agreement that states enforcement fees are only recoverable if agreeable by
both parties. May also state these fees are recoverable by "prevailing party".
With respect to documentation, what is Severability? - Answer -A key element of a lease
agreement that states that if a particular part of the agreement is not found enforceable, all
other parts of the lease are still enforceable. Avoids the danger of an entire document being
found unenforceable
3|Page
