Leasing is an economic transaction for financing investments, mainly for the purchase of equipment, while a leasing contract is the legal tool that facilitates such an economic relationship.²⁴⁹ Various types of leasing contracts have developed in business practice. The fundamental content of such a contract is that the lessee receives an item from the lessor for use, while the investment (i.e., the purchase of the item) is financed by the lessor.²⁵⁰ The key component is the lessee’s payments, as they are obliged to pay a “usage fee” as a reciprocal obligation.²⁵¹ In financial leasing, all significant risks and benefits associated with ownership of the leased asset are transferred to the lessee. Economic ownership is transferred, granting the holder unlimited rights to use or exploit the item. However, the economic owner does not have the right to sell the leased asset, as its legal owner remains the lessor. Financial leasing is characterised by the solidity of the contractual relationship, meaning that neither the lessor nor the lessee can unilaterally terminate the contract, and its duration is proportionate to the normal economic lifespan of the leased asset.²⁵² The fundamental purpose of a leasing contract is thus the use of the leased asset. In business practice, contracts often include provisions specifying that ownership of the leased item will be transferred to the lessee at the end of the agreed leasing period—either as part of the leasing contract itself or via a purchase contract executed after the fulfilment of a buyout option, with predetermined terms outlined in the leasing contract (including the buyout value).

Slovenian legal regulations do not contain specific provisions directly governing this type of modern autonomous economic transaction. As a result, the primary legal source for such relationships is the contractual terms agreed upon by the parties, which define their rights and obligations. Leasing contracts are thus considered unnamed contracts in civil law, meaning they are governed by the rules applicable to traditional named contracts in civil and commercial law. In financial leasing contracts, which exist in various forms, elements of both lease and sales contracts are interwoven. The Supreme Court of Slovenia has repeatedly emphasised in its rulings that a financial leasing contract takes on the characteristics of a sales contract if it contains a clause stipulating that the leased asset becomes the lessee’s property upon payment of the final instalment or a predetermined buyout price. If no such clause is included (or if the contract only provides an option for purchase), then the contract is considered a lease contract.²⁵⁴

Exercise:

 1. A and B agree that A will provide B with a specific car for use over a fixed period. In return, B will make payments, with the option to either return the car to A at the end of the term, extend the contract, purchase the car, or exchange it for a new one.

• Define the type of contract.
• What is its legal nature?
• What is the primary purpose of entering into such contracts?
• Explain the fundamental difference between financial and operational leasing.
• What are the essential rights and obligations of the lessor and lessee?

2. A and B enter into a (financial) leasing contract stipulating that the lessee selects the supplier and vehicle, while the lessor bears no responsibility for the supplier’s obligations, product features, or suitability of the leased item.

• Is it permissible to exclude the lessor’s liability for the supply and defects of the leased item? If so, who will be responsible for non-delivery or defects?
• What legal protection does the lessor have if the lessee delays multiple lease payments?²⁵⁵