Rhode Island law nixes bad truck contract clause
July 13, 2018
A new law in Rhode Island ends the inclusion of an unfair clause in trucking contracts in the state.
Gov. Gina Raimondo has signed into law a bill to 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.
Previously S2592, the new rule outlaws provisions in contracts that provide for shippers to be indemnified for losses caused by their own negligence and make them “void and unenforceable.”
Sen. Roger Picard, D-Woonsocket, was the bill sponsor.
“In the trucking industry large scale shippers attempt to shift liability to small businesses, or shippers, by inserting into the contract language provisions that leave small business owners on the hook for damages,” Picard said during Senate floor discussion. “This bill would correct that.”
The Owner-Operator Independent Drivers Association supports Rhode Island’s adoption of the new rule.
Mike Matousek, OOIDA’s manager of government affairs, has said the protection is a reasonable and fair solution to address rules that essentially provide shippers and receivers with immunity from any damage caused by their negligence while a trucker is on their property.
“Truckers should not be held liable for damages or injuries that are caused by the negligence of shippers and receivers,” he said. “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 in recent years changing rules on indemnity clauses. Rhode Island becomes the 46th state to forbid unfair provisions from contracts.
A full list of states where protections are in place is available. States yet to adopt protections are Delaware, Mississippi, New Hampshire and Vermont.
Affected contracts in Rhode Island are 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.
A separate new law is intended to streamline the process to acquire a commercial driver’s license.
S2763 permits the use of an electronic means of transmission of the medical certificate required for issuance of a CDL by the Division of Motor Vehicles.
The medical certification required prior to the issuance of a CDL will be electronically transmitted to the DMV. The process will be accessible through the agency’s website via a menu item labeled “commercial driver’s license medical certificate.”
To view other legislative activities of interest for Rhode Island, click here.