Which party has more exposure to liability in a true lease arrangement?

In a true lease arrangement, the lessor typically has more exposure to liability. This is primarily because the lessor owns the leased equipment and is responsible for the condition and maintenance of that equipment throughout the lease term. Should any defects or malfunctions arise that lead to injury or damage, the lessor can be held liable since they retain ownership and control over the asset being leased.

Additionally, the lessor may have legal responsibilities related to warranty claims and ensuring the equipment meets safety standards. In many cases, the lessee, while having some level of liability, is generally protected from claims related to the equipment's inherent flaws as they do not own it. Their exposure usually centers around misuse or failure to comply with the lease terms.

In contrast to this, the other parties mentioned, such as the lessee or the manufacturer, have different roles and responsibilities that typically do not equate to the same level of liability as the lessor. The lessee generally has liability over aspects related to the use of the equipment but is less exposed to liability for its condition, while manufacturers may have liability through warranties but are not involved in the lease arrangement directly. Therefore, in a true lease, the lessor indeed bears more liability related to the ownership and maintenance of