Coffee Machine leasing contract

[BlueSky2019]

I have taken over the business admin for our company and just discovered that we are paying a lease contract for a very substandard coffee machine at £110 + VAT pm. The agreement was taken out 3 years ago and I've just discovered it doesnt end until 2025!!!

The machine itself makes less than average coffee and hasn't even been used for the past 2 years as a kettle does a better job!

Leasing company says to get out of the contract we would still have to pay the full amount.

Does anyone have any ideas if we can find a way round this or negotiate a softer settlement??

 

[Newchodge]

Does it work properly? Is the leasing company responsible for maintenance?

 

[BlueSky2019]

I've not personally used it but it uses powdered milk which I'm told tastes very unpleasant. Therefore its only ever been used to make black coffee a fraction of its advertised capability!
We pay the lease to one company but the service is paid to the coffee company.

 

[BlueSky2019]

Also the coffee is never hot, luke warm at best. We pay extra for the coffee beans

 

[Newchodge]

I've not personally used it but it uses powdered milk which I'm told tastes very unpleasant. Therefore its only ever been used to make black coffee a fraction of its advertised capability!
We pay the lease to one company but the service is paid to the coffee company.

If the lease is properl;y written, you cannot get out of it. Unless they are in breach. Also, examine it closely for notice periods - you don't want to find you have to give 12 months notice or it will roll on for another 5 years!

 

[Newchodge]

Also the coffee is never hot, luke warm at best. We pay extra for the coffee beans

Complain immediately about this failure to provide the service paid for.

 

[Gyumri]

It's usual to lease these appliances for seven years so it's good to see that you've finally woken up to smell the coffee. Unless the small print is extra small then it's a fair contract and the court's are not there to let parties escape from a bad bargain.

Others here may be able to suggest less palatable (pardon the pun) solutions.

 

[kulture]

The problem with coffee machines is that they need to be properly cleaned daily and serviced regularly . Further the water supply should be filtered and the filter changed when recommended (typically 3or 6 months)
The daily cleaning would be down to you but all the rest would be down to the supplier. Have they been doing this. Further a decent coffee machine supplier should be training you into the use of the machine and how to get the best out of it. Otherwise you will not be buying beans etc from them.

What are their obligations under the lease? Have they been doing them? If not has this failure materially affected your enjoyment of the machine? On that basis do you have enough to have a case to terminate the contract, or withhold payment?

 

[BlueSky2019]

Thank you. I've emailed the supplier to establish what the SLA obligations are.
Would still far rather get rid of the thing but I guess it is what it is

 

[Mark T Jones]

The quality of the coffee is nothing to do with the leasing company, they just provided the funding.

It's most likely that the problem lies with the person who bought/ committed to the deal being too keen to get the machine and not reading or questioning the contract.

There is a small chance that either the machine or the lease was demonstrably miss-sold, you'd need to go through all correspondence to prove it

 

[kulture]

Thank you. I've emailed the supplier to establish what the SLA obligations are.
Would still far rather get rid of the thing but I guess it is what it is

The lease should specify the SLA and they should have delivered to the SLA. If they have not, and if you could reasonably argue that their failure is material then you could have a case to terminate the contract.

 

[Lucan Unlordly]

Also the coffee is never hot, luke warm at best. We pay extra for the coffee beans

and hasn't even been used for the past 2 years

Why are you buying Coffee Beans if you haven't used it for the past 2 years?

Like most machinery, leaving them idle isn't good for their health!

 

[Deleted member 335660]

Hi Bluesky,

I used to sell beverage vending machines and, as others have mentioned, the lease is purely a financial arrangement as your company did not want to pay cash for it.

I would suggest you find a coffee servicing company and get them to look at it. Coffee taste is a matter of beans, cleaning and water quality and they could help you turn it into a useful resource.

If you don’t want to do that, then accept you need to pay for it unless you can get someone to take over the lease.

 

[WaveJumper]

All good advice above, think I would also be concerned about what else the company is paying for thats not being used

 

[fisicx]

@BlueSky2019 - did your problem manager sign the contract?

 

[Paul Norman]

You are stuck with that machine until the end of the lease. These leases are water tight. It will cost you a LOT to end it early.

If it makes poor coffee, that is either:

1. The machine malfuncitioning. Get onto the people who maintain it.

2. A matter of personal taste, in which case those that don't like it will have to drink something else.

Make sure that, at the end of the lease, you don't get into this kind of agreement again.

 

[Mark T Jones]

You are stuck with that machine until the end of the lease. These leases are water tight. It will cost you a LOT to end it early.

If it makes poor coffee, that is either:

1. The machine malfuncitioning. Get onto the people who maintain it.

2. A matter of personal taste, in which case those that don't like it will have to drink something else.

Make sure that, at the end of the lease, you don't get into this kind of agreement again.

And be sure to terminate at least 3 months before the end.

 

[Paul Norman]

And be sure to terminate at least 3 months before the end.

Yes.

This is very important indeed.

 

[forevergroup]

You aren’t the first company in the world to have a poor value equipment lease and you certainly won’t be the last.

Worst I’ve seen was £40,000 (yes really) for a four-person telephone system over seven years.

I’ve also seen another company sign up to £17,000 over five years for £4500 worth of printers (plus consumables/maintenance) way in excess of their actual print volumes.

We worked out that commercial finance to buy similar printers + on-site support + consumables would be closer to £10k so that’s £7k down the drain (or in this case in the printer company pockets).

Unfortunately people don’t always get the calculator out when spending their employer’s money in the same way they would their own.

Company probably needs to take the hit on the bad procurement decision I’m afraid, although as others have suggested do make sure you give termination notice at the earliest possible appropriate point.