New Jersey law in effect Nov. 1 protects against truck contract rule

By Keith Goble, Land Line state legislative editor | 10/28/2016

Early next week in New Jersey a new law takes effect to no longer permit indemnification clauses to be included in most trucking contracts. The clauses are set up to protect shippers or hold them harmless from anything that happens with a shipment.

In effect Tuesday, Nov. 1, the new law outlaws provisions in contracts that provide for shippers to be indemnified for losses caused by their own negligence and make them “void and unenforceable.”

The bill swept through the Legislature with unanimous consent in summer 2015 and received Gov. Chris Christie’s endorsement a couple of months later. The effective date was delayed 13 months from receiving the governor’s signature.

States lawmakers across the country have been active the past few years changing rules on indemnity clauses. New Jersey is the 44th state to forbid unfair provisions from contracts.

A full list of states and the laws where protections are in place is available. States yet to adopt protections are Delaware, Mississippi, New Hampshire, New York, Rhode Island and Vermont.

Affected contracts in New Jersey are defined as “a contract, agreement, or understanding” between a motor carrier and a shipper covering the transportation of property for hire by the motor carrier, entry on property to load, unload, or transport property, including the storage of property.

Intermodal chassis, or other intermodal equipment, are excluded from the protection.

The Owner-Operator Independent Drivers Association supports passage of rules to protect against indemnity provisions in contracts.

Mike Matousek, OOIDA’s director of state legislative affairs, has said the change is a reasonable and fair solution to prevent all parties to a transportation contract from granting themselves blanket immunity.

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

To view other legislative activities of interest for New Jersey, click here.

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