Introduction
In India, every organization irrespective of its nature of work does require the logistics services for transportation of its goods from one place to another. Here, every organization try to outsource this work to some transport logistics service provider, as it is not feasible or economical for an organization to have its own vehicle for shifting of goods from one place to another.
But, outsourcing of this type of work do not remain easy these days, as the organization needs to understand and protect themselves from so many uncertain situations like accident of vehicle, damages occurred to the goods, etc. Further, the Service Provider should also take necessary precaution to protect his area of interest. He should also make his terms related to prior intimation of requirement of vehicle, condition for delivery in risk zone area etc. to be clearly defined in the agreement.
A clear defined agreement is required for smooth running of business, especially for the organizations that do outsource this type of work on daily basis and those who provide logistics services.
So here in this article we would try to curb out the clauses which needs to be inserted in any transport service agreements pertaining to goods.
Points to be inserted in these agreements are:
1. Background: It is very important to mention the background of the agreement so that in case in near future if the court is not able to check the purpose of entering into the agreement, the same can be referred to ascertain the primary intention of the agreement and on the basis of which agreement was entered into. Here most importantly details of experience or expertise of service provider needs to be mentioned like he has prior experience of this industry or work.
2. Commercials:Commercial i.e. rates for transport as agreed needs to be mentioned clearly in order to remove ambiguity at later stage. Rate should be agreed as per the vehicle as selected by the company especially when different- different vehicle is being arranged by the service provider. This should also be mentioned whether such charges shall be inclusive of taxes or exclusive of taxes.
3. Term:Terms for which the services of the service provider required is to be mentioned clearly. This would help the organization to save its time to renegotiate each and every transaction. Suppose if the term of agreement is one year. Then the terms and condition for such one year shall remain unchanged and same.
Further it should also be mentioned how the agreement would be renewed. Except commercial all the terms and condition should remain same depending upon scenario.
4. Obligation of the Service Recipient
a. To provide prior intimation for arrangement of Vehicle
b. To provide proper address and the name of the concerned person whom the goods are to be delivered
c. To transport goods which are legal and in deliverable condition.
5. Obligation of the Service Provider:
a. Timely delivery of products at agreed destinations.
b. Make number of vehicle available as agreed by the organization on daily basis.
c. The motor vehicle made available will be roadworthy and in running condition and the drivers thereof will be having valid driving licenses.
d. Hold all the valid licenses or registrations;
e. Not to transport any other goods belonging to any other party by the truck/van carrying the organization goods.
f. Not to carry overloaded vehicle
g. Proper insurance papers of the vehicle including of driver
h. All the other expenses except as agreed with agreed with organization to be bear by the service provider only.
6. Insurance & Damages:Who will be responsible for taking insurance of the vehicle including if any accident during transit occur. Responsibility for the goods carried in vehicle, in case any damages occurred, reduction in quantity etc.
7. Indemnity:In case any damage is incurred by one of the Party due to the fault of the other, then the other party shall indemnify the party who has suffered loss.
8. Termination:The clauses on the basis of which the relationship between the parties would stand terminated needs to be clearly specified in the agreement and also the time period for which notice would be served during the period of Agreement.
9. Relationship:Relationship of both the parties to the agreement shall be principal to principal basis. And there shall not be any relation of agent or principal; else in case of principal and agent relationship, organization would be responsible for the wrong doing of service provider.
10. Force Majeure:There could be certain circumstances, like flood, theorists under which a party to the agreement would not be in a situation to perform its duties for certain time period, under such things, the same shall not be considered as violation of terms and condition of the agreement. So the same needs to be capture in order to protect the interest of party to the agreement.
11. Warranties and representations:
a. Parties holding valid licenses, registrations etc;
b. Carry out the work as per applicable law;
c. Parties has full right to enter into this agreement;
d. Performance of this agreement not violating any other agreement or applicable law of land.
12. Jurisdiction: In case any dispute arises, the area of jurisdiction where any legal petition can be filed should also be mentioned in the agreement.
13. Arbitration Clause: If the Parties mutually agree to resolve any dispute out of the Court, then this clause will help them to resolve the matter through arbitration.
14. Registration of deed and expenses incurred: who will be responsible for the expenses to be incurred for registration of agreement, if required.
15. Service of Documents: The address of the parties where all official communication to be served should be mentioned in the agreement. In case of any communication, the documents could be couriered/ posted at the address provided above.
Conclusion: Hope the above article has helped you to understand the clauses to be covered while entering into transport service agreement pertaining to goods. In case you still have any doubt, do email us at complianceship@gmail.com or contact@complianceship.com
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