- Certain Indemnity Provisions in Motor Carrier Transportation Agreements Are Unenforceable in Tennessee
- June 19, 2008
- Law Firm: Miller & Martin PLLC - Nashville Office
Effective as of March 18, 2008, indemnity provisions in motor carrier transportation agreements are void and unenforceable in the state of Tennessee to the extent such provisions require indemnity for liability for loss or damages resulting from the indemnified party's own negligent acts. Indemnity provisions in the Uniform Intermodal Interchange and Facilities Access Agreement administered by the Intermodal Association of North America and in "other agreements providing for the interchange, use or possession of intermodal chassis, containers or other intermodal equipment" are, however, specifically excepted from the new legislation.
The new statute, which was passed by the Tennessee Legislature on March 10, 2008 and signed by Governor Bredesen on March 18, 2008 (Public Chapter No. 636 - Senate Bill No. 2970), shifts the burden of liability for damages caused by the negligent acts of one party away from the other party to the party who actually committed the negligent acts. The statute was passed as result of the efforts of the Tennessee Trucking Association, which was represented by Miller & Martin during the legislative process. The statute serves to maintain the incentive for both parties engaged in motor carrier transportation agreements to perform their obligations and duties in a prudent, reasonable and safe manner. In addition, a motor carrier is still required to comply with all federal and state motor carrier safety regulations, in addition to any common-law duty regarding safety, while transporting goods.
Nevertheless, in spite of the new legislation, risk may still be transferred from one party to another in motor carrier transportation agreements through the use of certain contractual provisions, such as those requiring a waiver of subrogation or requiring inclusion of one party as an additional insured on the other party's insurance policies. Therefore, it will continue to be critical for parties to motor carrier transportation agreements to review all provisions of such agreements and be alert to other ways that liability for damages may be shifted from one party to another.