An owner-operator agreement is a transportation term used to describe the relationship between the owner of a piece of transportation equipment, such as a semi-tractor or truck, and the operator, who leases the equipment from the owner for a specified period of time and money, according to Tom Bray for Truckinginfo.com. The agreement requires both parties to sign a formal contract detailing the use of the specified transportation equipment.Continue Reading
Most often, the piece of equipment is a semi-tractor or truck and might include a trailer. Owner-operator agreements are regulated by federal and state motor carrier laws and require both parties to carry insurance coverage to protect against any potential liability, explains Bray. The operator also must buy cargo insurance when required.
The agreement must define the length of the lease term and all equipment included in the owner-operator agreement. It must also contain a clause indicating the operator is not obligated to buy equipment or services from the owner. An owner-operator agreement usually includes information on how much the operator pays if the leased equipment is damaged during the lease term and any amount of money the operator must place in escrow for any potential equipment damage costs, states Bray.Learn more about Buying & Selling