Analyze the contract and answer the following questions (2 items x 15 points each)

1. If you were a lawyer and the lessee consulted you about it, what would be your assessment

of the contract? Give your advice to the lessee.

 As a lawyer I will advice my lessee to sign their agreement because according to ASC 842
defines a lease as: “a contract (or part of a contract) that conveys the right to control the
use of identified property, plant, or equipment (an identified asset) for a period of time in
exchange for consideration”. Also, the lessor conveys the right to control the use
of identified property, plant, or equipment (an identified asset) for a period in exchange for
consideration. It may seems to be controlling but the lessor is just doing the right thing to
protect what s/he still owned, the right to obtain substantially all the economic
benefits from use of the identified asset.The right to direct the use of the identified
asset.

2. To which kind of contract does the agreement belong? Why?

 It belongs to the valid contract. All parties must be in agreement (after an offer has
been made by one party and accepted by the other). Something of value must be
exchanged -- such as cash, services, or goods (or a promise to exchange such an
item) -- for something else of value.