A lessor is an asset’s owner that is leased, or rented, to another party, who is the lessee. Lessors and lessees enter into a legally binding contract, which is known as the lease agreement, the contract spells out the terms of their arrangement of the contract.A lessor may be either an individual type or a legal entity. The agreement is that who he, she enters into with another party is binding on both the parties that the lessor and the lessee who spells out the rights and obligations of each other. In addition to the use of this property, the lessor grants special privileges to the lessee, such as the early termination of the lease or renewal of the unchanged terms, solely at his or her will.