The new Act emerging from Tamil Nadu has made the written agreement mandatory to grant legal status for all...
Transportation Contract Or Agreement
Industrialisation is verily the yardstick of a developed economy. It is the industrialised countries that are self-sufficient in meeting their requirements and also earners of foreign exchange through exports. Geographical factors and skilled human resources have led to some regions of the globe being specialised in production of certain goods. It is undoubtedly those regions that are dotted with industries to facilitate easy movement of workers and materials to the factories. However, market for the produce may be located all over the world. Thus arises the need for transportation. Transportation of goods require a high degree of specialisation. It is not just sufficient to take goods from one point to another, but also to make sure that the goods are intact and special requirements for safety- if any, addressed.
There are four chief modes of transportation namely Airways, Seaways, Railways and Roadways. While the first two are used mainly in exports, the third one: railways is controlled by the government in India and does not involve drafting of a transportation agreement. Hence, let us observe roadways for the purpose of transportation agreements.
What Is A Transportation Contract?
Transportation is not only a highly specialised activity, but also that of the highest degree of accountability. Goods being transported are under the control of the service provider or the carrier. The carrier needs to ensure the safety and protect it from theft and loss in transit. Therefore, transportation can incur significant expenses on safety measures. Besides, there are various fees like toll payable for using certain roads which need to be paid. A transportation agreement is the best way to set forth the rights and responsibilities of the transportation company with the client who may be either a seller or a purchaser. It mentions the time required, payment, insurance details and all other details of the transaction.
What To Include In A Transportation Agreement?
A transportation Agreement is a document of prime importance mainly because it involves the safe transit of goods of high value. This involves the appointment of skilled drivers and employees. The responsibility of the carrier and its employees towards safety and accountability towards any negligence should find mention along with the terms and conditions of the proposed transport. Mentioned below are some of the points that should not be missed in a transportation agreement.
- Introduction and details of the parties
The agreement can begin with the description of the shipper and the carrier. The shipper is the company/entity that ships the goods through the carrier who happens to be the transportation company/entity. It can also me mentioned as to who approached whom. - Term
If the agreement is to operate continuously for some time- say, one year, it should be mentioned. If it is just for one particular transaction, it will not be required. - Independent Contractor
The carrier is usually engaged as an independent contractor in charge of the work undertaken and paid for the work as a whole. - Special Requirements
All particulars related to the special requirements related to packaging, hazardous substances, fragile goods, multiple pickups/deliveries, Cash on delivery, and any other individual requirements can be made note of. - Carrier’s Permits and Licensing
If the agreement involves transport of hazardous substances, explosives and other chemicals which need a special license, it should be mentioned whether the carrier has it. Apart from that, entry into any state in India for commercial vehicles requires permits to be issued by the state government or an All India Permit. The availability of such vehicles with the carrier can also be mentioned. - Number of shipments
It can be mentioned whether the transportation shall involve one trip or a series of trips. - Loading and unloading
The responsibility of loading and unloading needs to be with either the shipper or the carrier. This involves labour and needs to be sorted out initially. - Resources
The shipping can involve scores of resources, labour and expenditure on part of the parties. It should be made clear as to which shall be borne by the carrier and the shipper, respectively. It is the carrier who takes care of expenses like maintenance, repairs, fuel and other running expenses. The background verification and licenses of the driver and other employees should also be taken up by the carrier. If the shipper needs to make use of his resources, it needs to be mentioned as well. - Indemnity
It should be the duty of the carrier to indemnify the shipper against all losses that arise due to negligence or wilful misconduct of its employees. Even if an accident takes place while the driver is under the influence of alcohol or driving rashly, it should be indemnified by the carrier. - Risk
It should be mentioned as to which party shall be responsible for the safety of the goods. It may be based on whether the goods are in the custody of the shipper or the carrier, whether in warehouse or in transit. If the goods are damaged in transit, it is usually the carrier who shall bear the risks. - Insurance
Insurance of the vehicles used for transport shall solely be the responsibility of the carrier, while the goods carried may be insured by the shipper against unforeseen incidents. - Penalties
The shipper may impose penalties for delays caused in shipping by the carrier unless there were situations beyond his/her control, like strikes, blackouts, curfews, natural disasters etc. This needs to be mentioned. - Payment details
The details of payment including credit cycles if any can be mentioned.
Apart from the above details, clauses for Governing law/Dispute jurisdiction, Force Majeure, details of issuing notice, etc needs to be mentioned in order to cover overall legal aspects of the agreement.
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