A rental agreement is a contract, either written or oral, that is used to set a binding agreement between parties that plan to exchange possession of property temporarily. The most common uses of a rental agreement are for car rentals and equipment rentals. In the agreement, the specifics of the rental are defined, including the parties, property involved, detailed terms of rental, and payment specifics. The legal terms for the parties are lessor (owner) and lessee (renter). Rental agreements are most commonly operated on a day-to-day, monthly, or yearly basis, where the parties are allowed to extend the agreement as each period is elapsed.