The Dirty Dozen
The law firm of Seaton & Husk has compiled what it calls the “dirty dozen” of clauses which impact carriers (and Sunbelt) the most in Broker-Carrier Agreements.
1. Waiver under Section 14101 – A carrier waiving its rights under this provision can impact:
Claims rules and salvage
Over and under billing claims
Broker accounting and segregation rules
180-day rule for auditing freight bill
2.Special and consequential damages – carriers may actually be liable for any damage suffered, such as plant shut downs and replacement cost.
3. Indemnification – carriers maybe liable for any cost regardless of who caused the issue.
4. Additional Insured – some provisions can actually cause insurance problems for all parties if not worded properly.
5. Right of offset – provides the Broker with the right to not pay any current or future invoices if it deems a loss has arisen from the carrier’s actions.
6. Salvage rights – the broker, shipper or receiver have not duty to mitigate losses and the carrier will have the full burden of the loss.
7. Load, count and concealed damages – The carrier is liable for all shortages and damages regardless of the cause.
8. No penalty for non-payment – carrier cannot charge for cost of collecting late or non-payment by broker.
9. Jurisdiction/Choice of law – carrier subject to jurisdiction and law of state where broker is located. Also may be required to arbitration rather than suing.
10. Integration Clauses – the terms of service and conditions of the carrier and the provisions of the BOL may be excluded as part of the agreement.
11. Non-recourse provision – attempts to prevent the carrier from obtaining payment from any party other than the broker for any reason.
12. Back solicitation provision – carrier not allowed to haul for the shipper without paying broker a fee, regardless of how or when the obtained the loads.
