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Question · Whether a contract contains a lease

Nexalis signs a five-year contract with a hosting provider. The contract specifies 12 server racks, identified by their number and located in a room reserved for Nexalis; the provider can replace them only in the event of a breakdown. Nexalis decides which applications are installed, how much capacity it devotes to them and the processing schedules. The provider imposes security and temperature rules designed to protect its equipment, and it carries out the maintenance. Write a memo concluding, step by step, on whether there is a lease at the inception date.

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Judgment question: compare your answer with the criteria and the model explanation.

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