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The Owner Operator Lease Agreement serves as a crucial document in the transportation industry, outlining the relationship between a Carrier and an Owner Operator. This agreement encompasses several key elements that ensure both parties understand their rights and responsibilities. It begins by establishing the operational framework, where the Owner Operator commits to securing necessary permits and adhering to applicable laws, thus safeguarding compliance throughout the transportation process. The agreement specifies the obligations of the Owner Operator to deliver a minimum quantity of freight, while also detailing the terms for cargo handling and liability. Additionally, it emphasizes the independent contractor status of the Owner Operator, reinforcing the separation between the Carrier and any subcontractors engaged in the process. Important provisions regarding insurance requirements further protect both parties, ensuring that adequate coverage is maintained for various liabilities, including those related to hazardous materials. The document also addresses confidentiality, payment terms, and the conditions under which modifications can occur. By clearly outlining these aspects, the Owner Operator Lease Agreement not only facilitates smoother operations but also minimizes potential disputes, creating a foundation for a successful partnership in freight transportation.
Owner Operator Lease Agreement Preview
OWNER OPERATOR LEASE AGREEMENT
THIS agreement, entered into this ____day of ______________20___ between
______________________, (Hereinafter designated as “Carrier”), and
______________________, (Hereinafter designated as “Owner Operator”),
WITNESSETH:
WHEREAS, Owner Operator is engaged in the transportation of general freights of all kinds (FAK) by motor vehicle as a contract Carrier and desires to transport goods for Carrier; and WHEREAS, to facilitate such transportation and for the convenience in handling such transaction, the parties have agreed to the terms and conditions under which transportation shall be made, as hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual promises and conditions herein contained it is hereby agreed as follows:
(1) GENERAL PROVISIONS:
(a)Owner Operator, in its operations hereunder, shall secure all permits, licenses and approvals necessary for the accomplishment of the work to be done hereunder and shall comply fully with all applicable laws, rules, orders and regulation of all governments and agencies thereof, whether federal, state or local, and shall furnish Carrier with satisfactory evidence thereof whenever requested to do so. Among other things, Owner Operator shall provide to Federal Motor Carrier Safety Administration certificate showing Owner Operator holds contract authority from such commission covering the commodities and transportation routes to which this agreement relates, and Owner Operator shall give immediate notice to Carrier of any cancellation or modification of such authority. When transporting hazardous wastes, substances to or materials pursuant this agreement, Owner Operator shall comply with all applicable federal, state and local hazardous wastes, substances or materials laws and regulations and shall furnish Carrier with satisfactory evidence thereof whenever requested to do so.
(b)The Owner Operator hereby agrees to deliver for the Carrier for transportation, not less than the following amount: one shipment of freight of all kinds (FAK) during a period of
____________________. The Owner Operator further agrees, subject to availability and loading tendered for transportation by Carrier.
(c)All such cargo shall be transported hereunder in accordance with this agreement and the provisions of Carrier’s tariff’s or service contracts applicable to such cargo. Cargo shall include any containers in which goods are packed when received by Owner Operator hereunder.
(d)This agreement shall not be modified or altered unless in writing, signed by both parties to this agreement.
(e)This contract shall terminate all previous contracts between the parties hereto relating to the transportation Freight all kinds (FAK) and shall remain in full force and effect for the term of this agreement.
(f)It is to be clearly understood and it is the intention of the parties hereto that Owner Operator shall employ all persons operating trucks hereunder, that such persons shall be and remain the employees of the Owner Operator, that the Owner Operator shall be an independent contractor of the Carrier and that nothing herein contained shall be construed to be inconsistent with that relation or status.
(g)It is further to be clearly understood that where the Owner Operator engages any
subcontractor for any portion of the work hereunder, such engagement will not alter the relationship of the Owner Operator to the Carrier as an independent contractor and shall not establish any relationship or obligation between Carrier and any subcontractor. Owner Operator will continue to be solely responsible for compliance with or performance for any subcontractors actually doing such work and will otherwise defend, indemnify and save harmless the Carrier, its agents and servants from any such claims, liabilities, penalties and fines (whether criminal or civil), judgments outlays and expenses (including attorney’s fees).
(h)Owner Operator shall defend, indemnify and save harmless the Carrier, its agents and servants from any and all liabilities, penalties and fines (whether criminal or civil), judgments, outlays and expenses (including attorney’s fees) resulting from Owner Operator’s failure or the failure of Owner Operator’s agents, employees, subcontractors or representatives to comply with any applicable laws and regulations, whether federal, state or local, or property arising out of the performance of this agreement caused by the acts, failure to act or negligence of Owner Operator, subcontractors, its agent, employees, or representatives.
(i)Owner Operator will assume all liability for and will otherwise defend, indemnify and save harmless the Carrier, its agents or servants from any and all liabilities, penalties and fines (whether criminal or civil). Judgments, outlays and expenses (including attorney’s fees) resulting from any release or discharge of hazardous wastes, substances or materials that occurs during transportation and Owner Operator will assume all responsibility and liability for cleanup of any release or discharge of hazardous wastes, substances or materials that occurs during transportation and will otherwise defend indemnify and save harmless the Shipper, its agents and servants from any and all liabilities, penalties and fines (whether criminal or civil), judgments, outlays and expenses (including attorney fees) resulting from the cleanup of any such release or discharge.
(j)Owner Operator will defend, indemnify and save harmless the Carrier, its agents and servants from any and all liabilities, penalties and fines (whether criminal or civil in nature), judgments, outlays and expenses (including attorney’s fees) resulting from the Owner Operator’s failure or the failure of Carrier’s agents, employees, subcontractors or representatives to perform any of the terms, conditions, promises or covenants contained in this contract.
(k)Carrier shall have full responsibility for all payments, benefits, and rights of whatsoever nature to or on behalf of any of its employees and to ensure that its subcontractor shall have the same responsibility.
(l)It is further agreed by the parties hereto that Owner Operator is not to display the name of Carrier upon or about any of the Owner Operator’s vehicles, without Carrier’s written consent.
(m)Any limitation on or exemption from liability in any tariff, receipt, bill of lading, or other document issued by or on behalf of Owner Operator shall have no legal effect and shall not otherwise apply with respect to shipments tendered by or on behalf of Carrier unless specifically agreed in writing by the Owner Operator. Any limitations on or exemptions from liability contained in a Owner Operator’s tariff, receipt, bill of lading, or other document issued in conjunction with a specific shipment moving under this Contract shall have no legal effect and shall not otherwise be applicable to such shipments.
2.RECEIPTS OF GOODS:
(a)Owner Operator agrees, upon receipt from Carrier of such quantities of Carrier’s goods as may be tendered from time to time under this agreement by Carrier or by a third party on behalf of Carrier to give Carrier a written receipt thereof, which shall be prima facie evidence of receipt of such goods in good order and condition unless otherwise noted upon the face of such receipt; and, in the case of transportation of hazardous wastes, substances or materials such written receipt shall be prima facie evidence of receipt of such wastes, substances or materials in a condition and manner which complies with all applicable laws and regulations, whether federal, state or local. In the event that Owner Operator elects to use a tariff, bill of lading, manifest or other form of freight receipt or contract, any terms, conditions and provisions of such bill of lading, manifest or other form shall be subject and subordinate to the terms, conditions and provisions of this Agreement, and in the event of a conflict between the terms, conditions and provisions of such tariff, bill of lading, manifest or other form and this Agreement, the terms, conditions and provisions of this Agreement shall govern.
(b)Owner Operator agrees to take signed receipts upon forms satisfactory to Carrier from all persons to whom deliveries shall be made, which receipts shall be retained by Owner Operator for at least two (2) years and shall be available for inspection and use of Shipper.
3. CARE AND CUSTODY OF MERCHANDISE:
(a)Owner Operator hereby assume the liability of an insurer of the prompt and safe transportation of all goods entrusted to its care, and shall be responsible to Carrier for all loss or damage of whatever kind and nature and howsoever, caused to any and all goods entrusted to Owner Operator hereunder occurring, while same remains in the care, custody or control of Owner Operator or to any other persons to whom the Owner Operator may have entrusted said goods and before said goods are delivered as herein provided or returned to Carrier.
(b)On occasion, Owner Operator will be requested to transport reefer cargo refrigerated containers. On all occasions, refrigerated containers must be transported with an attached generator set (nose mounted or
4. INSURANCE:
(a)Owner Operator agrees to be a motor Carrier member in good standing in the Uniform Intermodal Interchange Agreement (UIIA). Owner Operator further agrees to comply with the insurance requirements of the Federal Motor Carrier Safety Administration and the states through which the Owner Operator operates. Owner Operator’s insurance coverage shall, at a minimum, comply with the minimum requirements as stated in the UIIA.
(b)The Owner Operator agrees to carry cargo, personal injury, death, equipment and general insurance and will promptly reimburse Carrier for the value of any goods (including containers) lost or destroyed during the period of Owner Operator’s responsibility under clause (3) (a). All such insurance shall be as additional insured.
(c)The Owner Operator agrees to provide the UIIA with appropriate certification and a copy of each policy of insurance and renewals thereof or other satisfactory evidence that Owner Operator has obtained insurance in compliance with the requirements and terms of this agreement.
(d)The Owner Operator will arrange with its broker and/or insurance Carrier(s) that notice of coverage and limits will be sent directly to the UIIA, as well and cancellation notices and
amendments to coverage(s).
5. ASSIGNMENTS:
This contract cannot be assigned by Owner Operator without the written consent of Carrier.
6. COMPENSATION, COMMODITIES, TERRITORY:
(a)Acceptable rates and charges, rules and regulations, the commodities to be transported, and the points from and to which they shall be transported, are to be furnished the Carrier, the Federal Motor Carrier Safety Administration and other regulatory bodies as may be required, as set forth in the rate schedule attached hereto and made a part hereof. Carrier agrees to pay Owner Operator as full compensation for services to be performed by Carrier under said rules and regulations the rates and charges set forth in the rate schedule, within sixty (60) days of invoice date.
(b)This agreement is to become effective upon signature by Carrier and Owner Operator.
7. CONFIDENTIALITY:
Owner Operator shall treat as confidential, and not to disclose to third parties, the terms of this agreement or any information concerning the Carrier’s business including information regarding suppliers, products and customers without in each instance obtaining Carrier’s written consent in advance.
8. NOTICES:
All notices given pursuant to this agreement shall be given in writing by certified or registered mail, return receipt requested, and addressed as directed by the parties from time to time.
CARRIER: ______________________________________________________________
9. APPLICABLE LAW:
To the extent state law applies, this agreement shall be governed by and interpreted in accordance with the laws of the state of ____________________.
SIGNATURES
•OWNER OPERATOR
_______________________________
NAME
•CARRIER
_______________________________
NAME
Common mistakes
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Incomplete Dates: Failing to fill in the date of the agreement can lead to confusion about the contract's effective period. Ensure that both the day and year are clearly indicated.
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Missing Signatures: Not signing the agreement or neglecting to obtain the Carrier's signature can render the contract invalid. Both parties must sign for the agreement to be legally binding.
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Incorrect Information: Providing inaccurate details about the Carrier or Owner Operator, such as names or addresses, can create issues later. Double-check all information for accuracy before submission.
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Ignoring Required Attachments: Forgetting to include necessary documents, like proof of insurance or permits, can delay the process. Make sure all required attachments are submitted along with the agreement.
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Dos and Don'ts
When filling out the Owner Operator Lease Agreement form, there are several important dos and don'ts to keep in mind. Here’s a helpful list to guide you:
- Do read the entire agreement carefully before filling it out to understand all terms and conditions.
- Do provide accurate and complete information in all sections of the form.
- Do ensure that you have all necessary permits and licenses before signing the agreement.
- Do keep a copy of the signed agreement for your records.
- Don't leave any sections blank; if a section doesn't apply, indicate that clearly.
- Don't sign the agreement without thoroughly reviewing it with a legal professional, if necessary.
- Don't overlook any deadlines for submitting the completed form or for compliance with the agreement terms.
Misconceptions
- Misconception 1: The Owner Operator is an employee of the Carrier.
- Misconception 2: The Owner Operator is not responsible for obtaining necessary permits.
- Misconception 3: The Owner Operator can modify the agreement without the Carrier's consent.
- Misconception 4: The Carrier is responsible for all liabilities incurred during transportation.
- Misconception 5: The Owner Operator can use the Carrier's name freely.
- Misconception 6: The Owner Operator does not need to maintain insurance.
- Misconception 7: The Owner Operator can assign the contract to another party without consent.
This is not true. The Owner Operator is classified as an independent contractor. This means that while they may work closely with the Carrier, they are responsible for their own operations and employees.
In fact, the Owner Operator must secure all necessary permits, licenses, and approvals to operate legally. They must also provide proof of these to the Carrier when requested.
Any changes to the agreement must be made in writing and signed by both parties. This ensures that all modifications are mutually agreed upon and documented.
This is incorrect. The Owner Operator assumes significant liability for any loss or damage to goods during transportation. They must also indemnify the Carrier against various claims and liabilities.
The Owner Operator must obtain written consent from the Carrier before displaying their name on any vehicles. This protects the Carrier's branding and reputation.
On the contrary, the Owner Operator is required to carry specific types of insurance, including cargo and liability insurance. They must also provide proof of this insurance to the Carrier.
This is a misunderstanding. The contract cannot be assigned to another party without the written consent of the Carrier, ensuring that both parties are protected in their agreement.
Detailed Guide for Using Owner Operator Lease Agreement
Filling out the Owner Operator Lease Agreement form is an important step in establishing a clear understanding between the Carrier and the Owner Operator. This form outlines the responsibilities and expectations of both parties involved in the transportation of goods. Follow these steps carefully to ensure all necessary information is accurately provided.
- Enter the date at the top of the form where indicated: "____ day of ______________ 20___."
- Fill in the name of the Carrier in the first blank space after "between."
- Fill in the name of the Owner Operator in the second blank space after "and."
- In Section 1(a), ensure that all necessary permits and licenses are secured. Provide evidence to the Carrier when requested.
- In Section 1(b), specify the amount of freight to be delivered during the stated period in the blank space provided.
- Review Section 1(c) to confirm that all cargo will be transported according to the Carrier’s tariffs or service contracts.
- Make sure to read through Section 1(d) to understand how modifications to the agreement should be made.
- In Section 1(e), note that this agreement will terminate any previous contracts related to transportation between the parties.
- Understand the independent contractor status outlined in Section 1(f) and ensure compliance with all terms.
- In Section 1(g), be aware of your responsibility for any subcontractors engaged during the work.
- Read through Sections 1(h) to 1(m) to understand the liabilities and indemnities you are agreeing to.
- In Section 2(a), agree to provide written receipts upon receiving goods from the Carrier.
- In Section 2(b), ensure you take signed receipts for all deliveries made, retaining them for at least two years.
- In Section 3(a), acknowledge your responsibility for the safe transportation of goods entrusted to you.
- In Section 3(b), confirm the requirement for transporting refrigerated cargo with a generator set when necessary.
- In Section 4(a), ensure you are compliant with insurance requirements as stated.
- In Section 4(b), agree to carry necessary insurance and reimburse the Carrier for any lost or destroyed goods.
- In Section 4(c), provide the UIIA with appropriate certification and a copy of your insurance policy.
- In Section 5, note that you cannot assign this contract without written consent from the Carrier.
- In Section 6(a), review the attached rate schedule for acceptable rates and charges.
- In Section 6(b), understand that the agreement becomes effective upon signature by both parties.
- In Section 7, agree to keep the terms of the agreement confidential.
- In Section 8, prepare to send any notices in writing by certified or registered mail.
- In Section 9, fill in the state that will govern the agreement.
- Finally, both the Owner Operator and Carrier must sign and print their names at the bottom of the form.