Define: Business Equipment
Business Equipment refers to tangible property, such as machinery, computers, furniture, tools, or vehicles, that a company uses primarily to operate, produce goods, or generate income. In a contract, the term identifies which physical assets are being sold, leased, insured, financed, or transferred between parties, distinguishing them from inventory, real property, or intangible assets.
Legal accuracy standard set & glossary spot-checked by Imad Mohammed Nazar , Skadden-trained M&A lawyer, Legal Engineer at GenieAI
What Business Equipment Means in a Contract
Business Equipment is a defined term used to describe the tangible, movable assets a company relies on to conduct its operations. This typically includes computers, machinery, office furniture, vehicles, tools, and similar items that are held for use rather than for resale. The term matters because contracts often need to distinguish equipment from other categories of property, such as real estate, inventory held for sale, or intellectual property.
When a contract references Business Equipment, it is usually creating obligations or rights that attach specifically to those physical assets, such as who owns them, who maintains them, who bears the risk of loss, and what happens to them at the end of an agreement. Because the definition determines the scope of these obligations, parties should read it carefully rather than assume a common-sense understanding will suffice.
How Business Equipment Is Defined or Measured
Most contracts define Business Equipment by reference to its use rather than a fixed list of items. The core test is whether the property is used or held primarily for business, trade, production of income, or sales, which means the same item could be classified differently depending on how it is actually deployed by the party in question.
Some agreements supplement this functional test with illustrative lists or schedules identifying specific assets, serial numbers, or asset tags. This is common in transactions such as a Relevant Circumstances
Relevant Sectors