Obligations of the Lessee

1) The lessee agrees to the provisions of this lease and has received a copy of it.

2) The lessee will return the automobile:

• a) And all accessories (including tires and tools) in the condition they were when received, with the exception of normal wear due to use.
• b) On the date specified in this lease, unless otherwise agreed upon later.
• c) To the lessor’s premises, unless otherwise specified.

3) If the lessee does not return the automobile at the time agreed upon in this lease, or does not declare his intention to extend the lease, the lessor or the police is authorized to repossess the vehicle without further notice and at the lessee’s expence. Extending the lease is dependent upon the consent of the lessor. If the lessee returns the vehicle 1 hour or later after the lease has expired, the lessor is authorized to demand up to 24-hours rental under the terms of this lease.

4) The vehicle shall be handled and driven carefully. Only those named as drivers on the first page of this agreement are authorized to drive the automobile. The lessee is liable for damages resulting from the use of the automobile for which no compensation will be paid by the vehicle’s insurance company. This includes damage to the automobile and/or injury to passengers due to the following:

• a) Off-road driving.
• b) Driving across rivers or any kind of water course.
• c) Intentional acts or gross negligence.
• d) Use of intoxicants by the driver.
• e) Vehicle use that contravenes Icelandic law and/or the provisions of this lease.

5) In the event of a collision or accident, the lessee shall immediately notify the appropriate police authorities as well as the lessor of the incident, and the lessee may not leave the scene before the police has arrived.

6) The number of kilometers (km) that the vehicle will be driven while this lease is in force is determined by reading a normal odometer supplied with the vehicle by the manufacturer. The lessee shall notify the lessor as soon as possible if the odometer is out of order or stops functioning during the term of the lease.

7) The lessor is not responsible for the disappearance of or damages to property that the lessee or any other party leaves in or transports with the vehicle.

8) The lessee agrees to pay the lessor, upon request:

• a) A deposit amounting to the estimated cost of hiring the car.
• b) Any and all expenses incurred by the lessor if he has to bring the vehicle back to his premises, in the event that it has been left somewhere without supervision, regardless of the condition of the vehicle, the roads or the weather.

9) The lessee is not authorized to have repairs done or make changes to the vehicle or its accessories, or to put the vehicle up as any kind of security, without the prior consent of the lessor.

10) The lessee is liable for all parking meter charges and fines for breaking traffic laws.

11) The lessee is not authorized to use the vehicle for transporting passengers for payment, loan it to others, or sublease it.

Obligations of the Lessor

12) The lessor will supply the vehicle at the agreed time and make sure it meets all the demands.

13) If the vehicle malfunctions, the lessor shall supply the lessee with a comparable vehicle as soon as possible. If the damages are minor, the lessor is authorized to have repairs done on the vehicle after obtaining the lessee’s consent.

14) The lessor shall inform the lessee of the content of this agreement, particularly as to the regards of the obligations that the lessee undertakes by signing it.

15) The lessor shall inform a foreign lessee about Icelandic traffic regulations, traffic signs, and regulations banning off-road driving. The lessor shall particularly point out the danger stemming from animals on the roads.

16) If the lessor wants to limit the use of the vehicle in regard to its equipment and/or road conditions, this shall be done in writing before this lease is signed.

17) The lessor will maintain valid liability insurance for his business operations.

Insurance

18) The lease sum/rental fee includes mandatory vehicle insurance, that includes liability insurance and accident insurance for the driver and the owner.

19) Third-party liability insurance consists of the amount stipulated by Icelandic law at any given time.

20) The lessee can purchase separate accident (All-risks) insurance. This policy will specify the amount deductible in each instance of loss.

21) This accident/all-risks insurance does not cover:

• a) intentional damages or damages due to gross negligence on the part of the driver.
• b) damages resulting from the driver being under the influence of alcohol, stimulants or sedatives, or in any other way incapable of driving the vehicle in a safe manner.
• c) Damages due to race or test driving.
• d) Damages due to war, revolution, civil unrest, riots.
• e) Damages done by animals.
• f) Holes burned into seats, carpets, or mats.
• g) Damages affecting only wheels, tires, suspension, batteries, glass (other than windows), radios, or loss by theft of parts of the vehicle and damages resulting from this.
• h) Damages caused by driving on rough roads to the vehicle’s transmission, drive, other parts that are in or attached to the chassis; damages to the chassis resulting from the vehicle scraping bottom on rough roads as a result of ridges being left by road graders; stones lodged in the road surface or on the shoulder of the road. The same applies to damages occurring when stones are thrown up, striking the underside of the vehicle during driving.
• i) Damages resulting from driving in places where vehicle traffic is prohibited, such as paths, tracks, banks of snow, ice, unbridged rivers or streams, beaches, places only accessible at low tide, or other trackless areas. However, compensation will be paid for damages if the driver is forced to leave the road, for example, due to road repairs.
• j) Damages caused by sand, gravel, ash, pumice, or other kinds of earth material being blown onto the vehicle.
• k) If the vehicle is transported by sea, no compensation will be paid for damages caused by sea spray/seawater.
• l) In other instances, reference is made to the general conditions for accident /All-risks insurance.

General provisions

24) This lease agreement should be kept in the vehicle at all times.

25) Additions and amendments to the conditions and provisions of this lease agreement shall be made in writing.

26) Icelandic law applies to agreements made on the basis of the terms cited above. This includes any claims for compensation that might be made. It also applies to the basis for and the calculation of compensation. The same applies to claims for damages based on liability outside this agreement. If legal disputes arise concerning this lease agreement, they will be heard before the lessor’s legal venue.

27) It should be pointed out that disputes between the parties to this lease agreement can be submitted to the active Arbitration committee of the Icelandic Consumers Association and the Icelandic Travel Industry Association.