Page 22 - ATR 5 2012 web 2

bility in order to get it. Their willingness
to agree to such terms can force larger
carriers to follow. Meanwhile, some
shippers have such large market shares
that carriers have no choice but to sign.
“if the shiPPer has No fiNaNcial iNceNtiVe to The problem is persistent, but not
behaVe carefully because the other guy’s necessarily growing. According to Greg
goiNg to Pay for it, well, theN the system Jones, the ATA’s general counsel and an
attorney at Wright Lindsey Jennings in
breaKs dowN.” Little Rock, Ark., “I honestly cannot say
that I’ve seen a massive expansion of it
—greg JoNes, attorNey, wright liNdsey JeNNiNgs in, say, the last couple of years. I think
there’s been enough pushback that ship-
pers are saying, ‘OK, that is a bit much,’
but it’s still out there and it did have
an expansion of use or attempted use
and COO, said the larger the ship- directly but did begin with the words, within the last decade.”
per, the more likely it is to include an “Carrier shall be solely responsible for Jones said a legislative remedy is
indemnification clause in the contract. any and all losses ...” needed because indemnification clauses
Maverick’s attorneys try to convince Such a broad statement presents a can be hard to argue against in court,
shippers to remove the language during red flag as well. “Any time a contract especially when involving larger carriers
the sales negotiation process. Sometimes says, ‘Carrier shall be solely responsible that knowingly signed a contract and
they are successful, and sometimes they for any and all losses,’ what does that had the resources to know what they
are not. Often, a contract that includes mean? That’s pretty broad,” he said. were getting into. Smaller carriers face
indemnification language includes Many contracts require the car- a different reality. They may receive an
other clauses Maverick can’t abide. rier to add the shipper as an additional assignment from a broker, arrive at the
“Quite frankly, we’ve walked away from insured to the carrier’s policy. That can dock and already have the freight loaded
some shippers because of the contract be a bad deal when an accident occurs before the shipper demands the signing
language,” he said. “We just didn’t on the shipper’s premises. The driver of a contract that includes an indem-
think it was fair, and we decided not to could put in a claim for disability or nity clause. It’s hard to imagine a car-
do business with them.” worker’s comp. If he sues the shipper, rier not signing in that circumstance,
Selig shared a couple of agreements then because of the contract, the carrier particularly if it needs the business.
shippers have tried to require his com- is again liable. The practice increases In other cases, a hurried driver pick-
pany to sign, including this 63-word insurance rates for carriers while reduc- ing up a load might be handed a stack
run-on sentence: “Carrier hereby agrees ing them for shippers. Maverick always of papers to sign that includes such a
to hold Shipper and Shipper’s directors, has its insurance underwriter look at clause. That driver probably is going to
officers, employees, agents and insur- the language to make sure it can add an sign those papers.
ers fully harmless from and indemnify additional insured, but small carriers When small carriers are involved,
them fully against any and all claims, may not be able to do that. If there’s an Jones said a legal case can be made that
demands, liabilities, losses, damages, accident and the policy does not grant an agreement is “unconscionable” – so
actions, suits, costs, and expenses, additional insureds, then the carrier has grossly unfair and involving such dif-
including reasonable attorney fees, and a serious problem because the insurance fering degrees of bargaining power
including but not limited to claims, company is not bound by a contract it between the shipper and the carrier that
demands, liabilities, losses, damages, didn’t sign. In those cases, the carrier the contract is void.
actions, suits, costs, and expenses has also violated a contract. Indemnity clauses, aside from their
directly and solely attributable to inherent unfairness, violate a standard
Shipper’s own fault.” UNfaIr lEvEraGE legal principle: The law is meant to
Not all indemnification clauses so A large carrier like Maverick can place the burden of avoiding problems
blatantly declare that the carrier will be negotiate or walk away from a bad deal. on the entity that most efficiently can
responsible for anything bad that hap- Smaller carriers don’t always have that do so. For example, a shipper protected
pens, including that which is “solely luxury. Most don’t have an attorney, by an indemnity clause, knowingly
attributable to Shipper’s own fault.” much less a legal team, prepared to or unknowingly, could load a trailer
Selig shared another proposed agree- review a document, and some need the
ment that never mentioned the shipper business so badly that they will risk lia-  32

22 arkansas truCking rePort | issue 5 2012