Solving the Problems of the Carrier
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When Entering Into a Contract
The Precautions That a Haulier Must Take to Ensure That no Misunderstanding Arises in Connection With an Agreement to Operate a Contract-A Licence EVERY day and in every way are there more signs that hauliers and hauliers' customers are not merely thinking about .post-war activities but are actually making preparations for them. One example of this tendency is in the number of inquiries I have been receiving lately about a form of contract suitable for use when making arrangements to operate under a contract-A licence. The Most recent application was a personal one, and as the.conversation, and particularly the subject matter, are of general interest, I think it might be a good plan to give them publicity in this aeries of articles.
Before commencing to tell the story it is necessary to emphasize that in order to obtain a contract-A licence the contract itself must he for a period of not less than 12 months. Moreover Such a licence will •be granted only if the contract be such that it is the haulier himself who employs and pays the driver.. These two points' should be borne in'mind in connection *Xitli what follow.
• The meeting with this haulier followed a preliminary letter in which he asked Me what he should charge for a contract of this nattire, details of Which were specified in his inquiry. he was apparently satisfied with the way-in which I dealt with that aspect of the matter; and followed up his letter by a personal visit, when lie told me that the order was coming his way and he would like. me to advise him how to draw up the actual form of contract.
Limits Regarding Legal Advice
I must confess that I immediately began to fence, because there are certain limits as regards the legal aspect of giving advice to hauliers beyond which I prefer not to go, and my first reaction was.to say to him: " Your proper course is to go to a solicitor so that you may be reasonably sure ,that there is not much likelihood'of any essential legal point tieing. overlooked. You will find• that the charges are moderate, especially compared with the safeguard which such a course will provide; for if anything went wrong because the deed was not properly drawn up your loss might
be cansiderable." .
"I have already been to see my solicitor," he answered, ".and he asked me so many questions about what should and what should, not go into the contract, so Many, indeed, which I could not answer on the spur of the moment, that I had to break off the conversation and promise to go home and think aoout it before I asked him to prepare the Contract. As a matter of fact I have not ,beeti home: as I left his office I decided that perhaps •the beta thing todo was to call and discuss the matter with you." • " What yQu really want, then," I said, " is for me to tell you the points that i-tre.st he kept in mind in drawing up the contract so that you may lay them before your solicitor, and leave it for hint to put My recommendations into legal form." . , He agreed that that was what he wanted. •
" In that case," I went on, " I will cut out reference to the usual preamble—the parties concerned, the ' hirer• of the one part '—and So on because he will know how to, do that without any assistance either from you or from me. . " The first thing you. must do is to tell tour solicitor exactly what you are going to supply under the contract," " You mean," he queried, " that I am to describe the vehicle to inni? "
" Something like that"; I said. " What you want to tell him is that you are going to supply. a vehiele and a driver and everything necessary to keep it on the road. Is the machine to be specially painted to suit your customer? "
" Yes, that. is so."
" In that case it will he better to make that plain in the first paragraph of your contract, that being. part of what you undertake to supply." . " What do you mean," he asked, " ' part of what undertake to supply '2 " • " Simply this: Instead of stating in. the contract that you are supplying merely a 2-ton boxvan together with driver and all essentials, you will modify that statement so that it reads that you are to supply a 2-ton boxvan, painted and letteied, together with the driver, etc.
" It is not necessary," I continued, " to give details of the painting and lettering in this paragraph. That should be kept separate, and you will probably find that your solicitor will advise you to embody those details in a schedule to be attached to the Contract." , " Why cannot I put those details in right away arid have done with it " he asked.
" Because it is advisable that the form' of Contract should be kept as short as reasonably possible. Extraneous details as to the colour of the van, lettering, and other matters of al, similar nature to which I shall have to refer later, are best kept separate,' " Here is the sort of wording that your solicitor will " probably advise, Whereby it is agreed that the contracter will rent to the hirer a 2-ton boxvan, suitably painted and lettered, more particularly described in the schedule hereto (hereinafter • called the contract van) On the following terms:—' The next thing that should have attention in drawing up this contract is' the period to which it applies, note of any option to renew, and -provision for terminating the contract."
" Why is there any necessity to provide for termination' of the contract when it is for a given period? " • Terminating the Contract " It is, essential to have some provision for terminating it. Either you or your customer might find it impossible to continue, and the reasons may be beyond the control of either of you. His or your business might fail, and, neither he nor you would like to be told, at a moment's notice, either that he did not want you or that you were not prepared to work any longer for him. To prevent anything of that kind' happening you must insert something in this second clause which provides that due notice will be given before the contract can be terminated. Here is a simple clause which illustrates what I mean. ' For a period of 12 months from March I, 1945, and thereafter, unless and until determined by three months' notice in writing by either party and subject to the following terms, conditions, and general arrangements:—' " You see," I said, " the 12 months is inserted as being the minimum period for which you can enter into a contract-A licence, but there is no definite indication that you should cease to operate this contract at the end of 12 months; it is to run on until one or other of you wishes to terminate, but that can be done only after three fuoutlis' noticein writing.
" Next tomes a clause stating the conditions of the hire, that is, a .clause which specifies what you are going to do for your custbrner according -to the terms of this contract, Such a clause will run something like this. ' The contractor agrees to house, wash and clean, the van and keep it and all parts thereof in good proper repair and condition and in good running order, and in the event of the van being unable to run through accident or any other cause the contractor will proville another One of similar 'style and capacity to replace it. It is expressly agreed that the hirer shall not make any claim for any damage or loss occasioned by accident, or other cause.' "
" What is that about supplying another van? " he asked. " Shall I have to do that? " •
" You certainly will, and that is one of the liabilities which a haulier, who enters into a contract for hire takes upon himself."
That is going to cost me :something; isn't it? " Of course it is, but you need not worry. There was an allowance made for that contingency in the figure which I quoted for you. I did not include it as'a separate item, but it was included in the figure which I allowed for establishrtlent costs
. Incidentally, this is a very. important point which all readers of this article vitro have any prospect of such contract of hire should keep well in mind...
" But what does that last sentence mean, about the -hirer not making any claim for consequential damage or kiss occasioned by accident or other canse? "
" It limits your liability: You will understand better what is meant by it When we come to a subsequent clause which deals with the matter of insurance.
A Change of Driver " The next clause, is really a companion to the one wehave just ,read. It tells that you as contractor, agree • to provide, petrol, oil, tyres, and ,other things necessary for the proper running of the van, when in town or in the • country, and. to pthvide and pay the wages of a competent and trustworthy driver, acceptable' to the' hirer. The driver shalt at all times be under the direct control of the contractor,by arrangement with' the demands of the hirer, and in the event of the driver not satisfying the require.merits of the contractor, or the hirer, the contractor reserves himself the right to change him for another Competent and
trustworthy driver acceptable to the hirer.' . " There is not much that calls for extended discussion in that clause unless yOu have a point to raise."
" No. So far as I am .conceaned that appears to lie
quite in order.' . " Now," I continued, " comes the clause I mentioned dealing with insurance, " The contractor agrees to insure the van against fire, accident, damage, and all third-party claims, and to make good ail' damage to, or lo,s of, the van, and also damage to property or persons. ' This does not include .risk to passengers or goods carried by the van.' " Do you see the link-up between this clause and the other one which stipulates that the hirer shall not make any claiin occasioned by accident, loss, or other cause? "
" No, I am afraid I do not." .
" Well, the point is this. In the otherclause you stipulate that you will not be responsible for loss or dainage occasioned by accident, and in this latter one you point out that you insure for the normal .risks of motorvehicle operation, but not against the risk of damage to passengers or goods, which means that you are, in effect, telling the hirer that he himself must take out an insurance policy to coVer what is commonly called ' risk to goods transit.' In other words,..you accept responsibility for damage to the vehicle, injury to your own driver, third. party claims and so on, but you will not accept responsibility for anything which, may happen to the goods as the result of such accident. • .
"
You should tell your solicitor-that it is most essential to make it quire clear that You take no responsibility for the loss of 'any of the goods, however that loss may be brought abOut, nor for any Money entrusted to the driver. It should be made a condition of the contract that the goods, and lunacy paid in connection with the work on which' the vehicle is engaged, are entirely under the control of the customer, who, as has already been stated, has been referred to in the contract as the '.hirer.' • " Now comes another safeguard for yourself. You must arrange to have a clause inserted providing that it a breakdown results' from overloading, your customer will have to bear the cost, of the vehicle which has to be hired to, replace it, .as well as the expense involved in effecting the repairs. . Here is a typical' clause that will cover that risk: ' The hirer agrees to hire the vehicle for the period above mentioned, and not at any time to overload it (the carrying capacity of the vehicle being limited to 2 tons), and to give instructions to his servants accordingly, the hirer agreeing to accept liability for all damage caused to the vehicle' by feason of it being overloaded. The contractor reserves himself the right to check the gross load of the said van should occasion arise.'
" The next. thing you want to guard against is the use of your van by this customer for somebody else's goods." But can I stop that, and does it matter to me what goods it carries go long as I get paid for the van? "
Carrying Other People's Goods
" From the purely practical point of view you may not, perhaps, be greatly 'concernedif your vehicle be Used by this customer to carry goods other than his own, but I rather think that the point, there: is the legal one. I am not sure, but there, seems to me just a risk that if your vehicle, licensed under a contract-A to carry goods for this particular hirer, were to be found carrying goods of someone else, you might get into 'trouble. Your safeguard is some clause such as the one I am about to give you.
" Something like this would .probably be' sufficient. '. The hirer agrees to use the van for the delivery of goods, etc., handled by hirreand for no other purpose without the written authority of the contractor.'
" The next thing you want to tell your solicitor to do is to guard against over-speeding, particularly in respect of your driver being encouraged by the hirer, or customer. to exceed the legal limit merely so that more work can begot out of your van.
" Here is a clause that will cover that point. ' The hirer agrees to assist the contractOr at all times in respect of not allowing or 'encouraging the driver to exceed the speed limit, the contractor agreeing to give the driver specific instructions in this respect, but all liability for fines or otherwise shall be borne, by the contractor who shall indemnify the hirer in respect of all Such liability.
" The' next clauSe would probably. have been suggested by your solicitor in any case, as it is one which appears
• -in practically every .contract of this nature. It reads: The charges to be, paid by the hirer, and provided for in the schedule,are based on the present cost of wages-and petrol, as specified in the schedule hereto, and are subject to adjustments in price to the extent of any higher or lower cost of these items that may occur,' "
S.T.R. (To be continued.)