Structure
Misconceptions
Here are ten common misconceptions about the Owner Operator Lease Agreement form:
- Owner Operators are employees of the Carrier. Many believe that entering into this agreement makes them employees. In fact, Owner Operators are independent contractors, maintaining their own business status.
- The Carrier is responsible for all insurance. Some think the Carrier handles all insurance matters. However, the Owner Operator must carry their own insurance and comply with specific requirements.
- All transportation routes are approved by the Carrier. It is a misconception that the Carrier automatically approves all routes. Owner Operators must secure necessary permits and licenses for their specific routes.
- Owner Operators can modify the agreement verbally. Many assume they can make changes to the agreement through conversation. Any modifications must be in writing and signed by both parties.
- Hazardous materials can be transported without special compliance. Some believe that transporting hazardous materials is straightforward. In reality, Owner Operators must comply with strict regulations and provide proof of compliance.
- Owner Operators can use any subcontractor without restrictions. There is a belief that Owner Operators can freely engage subcontractors. They must ensure that subcontractors do not alter their independent contractor status with the Carrier.
- The Carrier is liable for damages during transportation. Many think the Carrier assumes all liability for damages. In fact, the Owner Operator is responsible for loss or damage to goods while in their care.
- The Owner Operator can assign the contract to anyone. Some believe they can transfer the agreement freely. However, assignments require written consent from the Carrier.
- All terms of the agreement are negotiable. There is a misconception that every aspect of the agreement can be negotiated. Certain terms are standard and cannot be altered without mutual consent.
- Confidentiality only applies to financial information. Many think that confidentiality pertains solely to financial details. However, all business-related information, including suppliers and customers, must remain confidential.
Detailed Steps for Filling Out Owner Operator Lease Agreement
Filling out the Owner Operator Lease Agreement form requires attention to detail and accuracy. Completing this form correctly is essential for establishing a clear understanding between the Carrier and the Owner Operator. Below are the steps to guide you through the process of filling out the form.
- Enter the date of the agreement in the format ____ day of ______________ 20___.
- Fill in the name of the Carrier in the designated space.
- Fill in the name of the Owner Operator in the designated space.
- Specify the period for which the Owner Operator agrees to deliver freight, in the section that states "not less than the following amount: one shipment of freight of all kinds (FAK) during a period of ____________________."
- Indicate the applicable laws, rules, and regulations that the Owner Operator will comply with, as required in the General Provisions section.
- Provide evidence of all necessary permits and licenses that the Owner Operator holds.
- Ensure that all cargo transported is in accordance with the Carrier’s tariffs or service contracts.
- Review the indemnification clauses and ensure you understand the responsibilities regarding liabilities and penalties.
- Complete the Receipts of Goods section by agreeing to provide written receipts for goods received from the Carrier.
- In the Care and Custody of Merchandise section, acknowledge the responsibilities regarding the prompt and safe transportation of goods.
- Fill out the Insurance section, confirming compliance with insurance requirements and providing necessary documentation.
- In the Assignments section, note that the contract cannot be assigned without written consent from the Carrier.
- Detail the acceptable rates, charges, and the commodities to be transported in the Compensation, Commodities, Territory section.
- Confirm confidentiality regarding the terms of the agreement and any related information.
- Complete the Notices section by providing the necessary addresses for written communications.
- Specify the applicable law governing the agreement by filling in the state name.
- Finally, both parties should sign and print their names in the designated signature areas.
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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
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Dos and Don'ts
- Do: Read the entire Owner Operator Lease Agreement carefully before filling it out. Understanding every clause will help you avoid potential misunderstandings later.
- Do: Ensure that all information you provide is accurate and up-to-date. Double-check names, addresses, and dates to prevent errors.
- Do: Keep a copy of the completed form for your records. This will be useful for future reference and in case of disputes.
- Do: Consult with a legal professional if you have any questions about the terms or conditions of the agreement. Getting clarity can save you from future complications.
- Don't: Leave any sections blank. Fill out every part of the form to avoid delays or issues with processing.
- Don't: Sign the agreement without fully understanding your obligations and rights. Ensure you are comfortable with all terms before providing your signature.
Key takeaways
- Understand the Parties Involved: The agreement is between a Carrier and an Owner Operator, each with specific roles in the transportation of goods.
- Permits and Compliance: The Owner Operator must secure all necessary permits and comply with applicable laws at all levels of government.
- Delivery Obligations: The Owner Operator agrees to transport a minimum amount of freight during the specified period.
- Written Modifications: Any changes to the agreement must be documented in writing and signed by both parties.
- Independent Contractor Status: The Owner Operator is classified as an independent contractor, maintaining responsibility for their employees and subcontractors.
- Liability for Compliance: The Owner Operator must indemnify the Carrier against liabilities arising from non-compliance with laws and regulations.
- Insurance Requirements: The Owner Operator must maintain insurance coverage that meets federal and state requirements.
- Confidentiality: The Owner Operator is required to keep the terms of the agreement and any related business information confidential.
- Receipts for Goods: The Owner Operator must provide written receipts for all goods received, which serve as proof of condition upon receipt.
- Effective Date: The agreement becomes effective upon the signatures of both the Carrier and the Owner Operator.
Similar forms
The Owner Operator Lease Agreement shares similarities with a Freight Broker Agreement. Both documents establish a relationship between parties involved in the transportation of goods. In a Freight Broker Agreement, a broker arranges for the transport of freight on behalf of shippers, while the Owner Operator Lease Agreement involves an owner-operator directly transporting goods for a carrier. Each document outlines responsibilities, compensation, and compliance with regulations, ensuring clarity in the business relationship.
Another similar document is the Independent Contractor Agreement. This type of agreement defines the relationship between a contractor and a client. Like the Owner Operator Lease Agreement, it specifies the terms of work, payment, and responsibilities. In both cases, the contractor (or owner-operator) operates as an independent entity rather than an employee, which affects liability and tax responsibilities.
A Bill of Lading is also comparable to the Owner Operator Lease Agreement. This document serves as a receipt for goods being transported and outlines the terms of carriage. Both documents emphasize the importance of compliance with regulations and provide evidence of the parties' obligations. The Bill of Lading can be seen as an extension of the Owner Operator Lease Agreement, detailing specific shipments under the broader terms of the lease.
The Equipment Lease Agreement is another related document. This agreement involves the leasing of equipment, such as trucks or trailers, for transportation purposes. Similar to the Owner Operator Lease Agreement, it outlines the responsibilities of the parties involved, including maintenance and insurance obligations. Both agreements aim to ensure that the equipment is used properly and maintained throughout the lease term.
A Service Agreement is also akin to the Owner Operator Lease Agreement. This document outlines the terms under which services are provided, including payment and deliverables. Both agreements define the expectations of each party and provide a framework for resolving disputes. The focus on service delivery and compliance with applicable laws is a common thread between the two.
The Transportation Agreement is another document that shares similarities. This agreement outlines the terms and conditions under which goods are transported. It includes details about liability, payment, and compliance with regulations. Like the Owner Operator Lease Agreement, it ensures that both parties understand their roles and responsibilities during the transportation process.
A Master Service Agreement (MSA) is also comparable. An MSA establishes a long-term relationship between parties and outlines the general terms for future transactions. It can cover multiple projects or services, similar to how the Owner Operator Lease Agreement governs the transportation of goods over time. Both documents aim to streamline the business relationship and clarify expectations.
The Non-Disclosure Agreement (NDA) is another relevant document. While it focuses on confidentiality, it shares the importance of protecting sensitive information. The Owner Operator Lease Agreement includes confidentiality provisions to safeguard the carrier's business information. Both agreements emphasize trust and the need to maintain privacy in business dealings.
Lastly, a Compliance Agreement is similar in that it ensures adherence to laws and regulations. This type of agreement outlines the obligations of each party to comply with applicable laws, much like the Owner Operator Lease Agreement. Both documents emphasize the importance of following legal requirements to avoid liabilities and penalties.
Documents used along the form
The Owner Operator Lease Agreement is a crucial document in the transportation industry, outlining the relationship between the Carrier and the Owner Operator. In addition to this agreement, several other forms and documents are often utilized to ensure clarity and compliance in operations. Below is a list of commonly associated documents, each serving a specific purpose in the transportation process.
- Bill of Lading: This document serves as a receipt for goods shipped and includes details about the cargo, the shipper, and the consignee. It acts as a contract between the Carrier and the shipper, outlining the terms of transportation.
- Freight Manifest: A freight manifest is a comprehensive list of all cargo being transported on a particular shipment. It provides a detailed account of the items, including their weight and dimensions, facilitating smooth handling and delivery.
- Insurance Certificates: These documents verify that the Owner Operator has the necessary insurance coverage, including liability and cargo insurance. They protect both the Carrier and Owner Operator from potential financial losses during transportation.
- Permits and Licenses: Required by federal and state regulations, these documents confirm that the Owner Operator holds the necessary permits to operate legally. They ensure compliance with transportation laws and regulations.
- Rate Confirmation: This document outlines the agreed-upon rates for transportation services. It serves as a reference for both parties and helps prevent disputes regarding payment.
- Subcontractor Agreements: If the Owner Operator engages subcontractors, these agreements outline the terms of the relationship, ensuring that all parties understand their responsibilities and liabilities.
- Delivery Receipts: Upon delivery of goods, the Owner Operator must obtain signed receipts from the consignee. These receipts serve as proof of delivery and help in tracking the shipment's status.
- Hazardous Materials Declaration: If transporting hazardous materials, this document is essential. It provides information about the nature of the materials and confirms that the Owner Operator complies with safety regulations.
Each of these documents plays a vital role in the logistics and transportation industry, ensuring that all parties involved adhere to regulations and maintain a clear understanding of their obligations. Proper documentation fosters accountability and efficiency, ultimately benefiting both the Carrier and the Owner Operator.