Explanation of Article 407
The article addresses the definition of a lease contract, and from this definition, it is clear that a lease contract has several components, including:
First: It is a contract that imposes an obligation on the lessor to enable the lessee to benefit from a non-consumable item, and this enabling must continue throughout the duration of the contract as will be mentioned in Article (416). Therefore, the lease contract establishes a personal right for the lessee against the lessor to enable him to benefit, but it does not establish a real right in the leased property.
The lease contract creates both positive and negative obligations on the lessor; the lessor is obligated to enable the lessee to benefit from the leased property, not merely to allow him to benefit from it, which is a negative obligation, and to deliver the leased property in a condition suitable for benefiting from it. The lessor is also obligated to carry out the necessary repairs to keep the leased property suitable for use and guarantees the lessee against any defects in the leased property that prevent or diminish its use.
Second: The subject of the lease contract is non-consumable items, as consumable items like money and food cannot be the subject of a lease contract.
Third: The lease contract is a time-based contract where time is an essential element. There is a close connection in the lease contract between the duration and the rent; the duration is the measure of benefiting from the leased property, and the rent corresponds to the benefit.
The lease contract is distinguished from other contracts by the following:
- The lease contract pertains to the benefit of the item, which distinguishes it from a sale contract; it pertains to the item itself, not the benefit.
- The benefit in a lease contract is exchanged for rent, which distinguishes it from a loan contract; in a loan, the borrower benefits from the loaned item without paying for it.
- The leased property in a lease contract remains after use and is returned by the lessee itself, which distinguishes it from a loan contract where the borrower returns the equivalent of the borrowed money, not the money itself.
- The lease contract pertains to the benefit of an item, not work, which distinguishes it from contracts related to work such as a contract for work and an agency contract.
- The lessee benefits from the leased property, which distinguishes the lease contract from a deposit contract; in a deposit contract, the depositary does not benefit from the deposit.
The main characteristics of a lease contract can be summarized as follows: 1- It is a consensual contract, as this system does not require a specific form for its conclusion, although a specific system may require a form in some types of lease contracts. 2- It is a contract of exchange. 3- It is a contract binding on both parties. 4- The elements agreed upon in a lease contract: the benefit of the leased property, the duration, and the rent.
Related To
Article 407
Lease is a contract that enables the lessor to provide, in return for rent, a nonconsumable thing to a lessee to use and enjoy for a specified period.