Rhode Island bill would outlaw unfair clauses in trucking contracts

By Keith Goble, Land Line state legislative editor | 4/28/2015

An effort underway in the Rhode Island General Assembly is intended to put an end to the inclusion of unfair clauses in trucking contracts.

A bill in the House Judiciary Committee would prohibit indemnification clauses in trucking contracts. The clauses are set up to protect shippers or hold them harmless from anything that happens with a shipment.

Sponsored by Rep. Patricia Serpa, D-West Warwick, H6111 would outlaw provisions in contracts that provide for shippers to be indemnified for losses caused by their own negligence and make them “void and unenforceable.”

The Owner-Operator Independent Drivers Association supports the bill.

Mike Matousek, OOIDA director of state legislative affairs, says the legislation is a reasonable and fair solution that will prevent all parties to a transportation contract from granting themselves blanket immunity.

“Existing state law provides shippers and receivers with immunity from liability for any damages or injuries to a trucker and his/her equipment that are caused by the negligence of a shipper or receiver,” Matousek said.

“Truckers should not be held liable for damages or injuries that are caused by the negligence of shippers or receivers. Conversely, shippers and receivers should not be held liable for damages or injuries that arise from the negligence of a trucker.”

State lawmakers across the country have been active the past few years changing rules on indemnity clauses. To date, 42 states have acted to forbid unfair provisions from contracts. Arkansas acted in the past month to prohibit the protection for shippers.

A full list of states, and the laws, where protections are in place is available. In addition to New Jersey, states yet to adopt protections are Delaware, Mississippi, New Hampshire, New York, Ohio and Vermont.

Affected contracts in Rhode Island would be defined as “a contract, agreement, or understanding” between a motor carrier and a shipper covering the transportation of property by motor carriers, entrance on property to load, unload, or transport property.

To view other legislative activities of interest for Rhode Island, click here.

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