Independent contractor operating agreement
14397 E Geronimo Rd, Scottsdale, AZ 85259
Between
ZO Enterprises, LLCA Motor Carrier
and
An Independent Trucking Contractor
INDEPENDENT CONTRACTOR OPERATING AGREEMENT
This independent Contractor Operating Agreement ("Agreement") is made and entered into this day of , 20 by and between ZO Enterprises an Arizona based LLC ("Company") and a U.S.
Dept. of Transportation - Federal Motor Carrier Safety Administration- licensed motor carrier (M.C. # 918720), located at 4681 N 84th Way, Scottsdale, AZ 85251 and ("Contractor"), located at; and further identified with tax identification number ; both collectively called the "Parties."
RECITALS:
WHEREAS, Company is a motor carrier with operating authority as required by 49 U.S.C. 13902, 49 C.F.R. part 365, and 49 C.F.R. part 392, and Company desires to obtain services for the transportation of freight by truck utilizing independent contractors under 49 C.F.R. part 376; and
WHEREAS, Contractor is separately engaged in the business of transporting freight by truck on behalf of public and private entities under operating agreements under 49 C.F.R. part 376; and
WHEREAS, Company and Contractor intend to create and maintain under the terms of this Agreement an independent contractor relationship under 49 C.F.R. part 376 and not a relationship of employer and employee; and
WHEREAS, Company desires to utilize the services and equipment of Contractor, and Contractor desires to render motor freight transportation service to Company, in the course of Contractors established trade, business and profession; and
WHEREAS, Contractor represents that he/she is the owner, or has permission to operate tractor/power units and has legal capacity to enter into this Agreement and commit personnel services for utilization under this Agreement; and
WHEREAS, Company and Contractor desire to enter into this Agreement for the purpose of carrying out the above-mentioned obligations in accordance with the provisions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants, terms, conditions and agreements contained herein, and for other good and valuable consideration the receipt and sufficiency of which the Parties acknowledge, the Parties mutually agree as follows:
If a good faith dispute exists as to Settlement amounts due and owing Contractor, either party may contest the amount or manner of compensation under the process described in Paragraph 21, Disputes.
a. Maintain in effect, at all times, any insurance as required by applicable state statutes and regulations, for all employee drivers, driver's helpers, agents, and laborers used by Contractor in the performance of this Agreement;b. File and pay all applicable state and local income taxes, tax withholding, employment, unemployment, taxes and returns, federal heavy vehicle use tax forms and returns, all of which it may be required to file on account of its employed drivers, driver's helpers and agents, and laborers used by Contractor in the performance of this agreement at the time and place specified in applicable federal, state and local laws and regulations and to report and pay when due all such taxes and contributions required to be paid in such forms and returns;c. If Contractor elects to transport employees or other persons assigned to its Equipment, Contractor must comply with 49 C.F.R. § 392.60 and such person must be specifically authorized beforehand in writing by Company and such authorization shall state the name of the person to be transported, the points where the transportation is to begin and end; and the date upon which such authority expires;d.With respect to the requirement of subparagraphs (a) (b) and (c) above, Contractor will furnish to Company such evidence of compliance with the foregoing as Company shall reasonably request.
a. Company shall maintain insurance coverage for protection of the public pursuant to 49 U.S.C. §13906, and any applicable related regulations, as well as all amendments and modifications thereof, as adopted by the Federal Motor Carrier Safety Administration of the U.S. Department of Transportation; and Company shall maintain cargo liability insurance as required by its customers.
b. Under no condition shall Company be responsible for any damage to personnel or Contractor's Equipment.
c. Contractor authorizes Company to purchase and maintain the following insurance coverage whether required by state law regulation, U.S. DOT authority or this Agreement:
d. Company is not in the insurance business and is not an agent of an insurance agency, insurance carrier or underwriter that may issue insurance coverage. Contractor waives any and all claims it may have at any time against Company arising out of any failure on the part of any insurance agent, insurance carrier or underwriter to cover or honor the terms and conditions of any insurance policy, which Contractor may purchase as a matter of convenience by way of settlement deduction or that is purchased by Company on behalf of Contractor.
e. Company will request that the insurer provide the Contractor with a certificate of insurance and complete policy for each such insurance policy.
f. Cargo Deductible / Company Equipment Loss Deductible: Contractor shall be responsible for the first $2,500.00 of any loss resulting from, in whole or in part, damage to or theft of cargo; and $2,500.00 of any loss or damage to or theft of Company equipment, including tractors or trailers, which Contractor negligently or intentionally caused by action or inaction, including but not limited to loss occurring by leaving unsecured or unattended cargo; or failing to tarp or secure cargo properly; or any other damage to cargo or Company equipment negligently or intentionally caused by Contractor.
g.Funds due Company from Contractor under this subparagraph 7(f) will be deducted from Settlement. Company will, at the time of deduction from Settlement, provide the Contractor with a written explanation and itemization of deductions made.
h. INDEMNIFICATION.
To the full extent permitted by law, Contractor, its employees, agents, heirs and assigns, hereby releases Company from any and all claims of liability for injury or property damage allegedly suffered or incurred by Contractor in the course of performance of any services under this Agreement, including any and all claims of liability for negligence against Company.
MOREOVER, to the full extent permitted by law, Contractor, its employees, agents, heirs and assigns, hereby agrees to defend, release, indemnify and hold harmless Company and its agents, employees, heirs or assigns, from any and all claims or lawsuits asserted against Company or its agents, employees, heirs or assigns, either directly or as a cross-defendant or third-party defendant by Contractor or its agents, employees, heirs or assigns, arising out of any accident or occurrence involving personal injury, death or property damage or other loss suffered or incurred by any third persons or Contractor or Contractor's employees, agents, heirs or assigns during or related to conduct in furtherance of this Agreement, except to the extent caused in part by any act or omission, negligent, willful or reckless of Company, its agents, employees, heirs or assigns
8. Equipment Identification: Contractor shall display all equipment identification of Company as required by law. All equipment identification shall be provided by Company and shall remain the property of Company. Such identification shall be removed by Contractor and remain the property of Company upon termination of this Agreement or at any time Contractor is transporting freight under authority of or in furtherance of the business of another U.S. DOT motor carrier. If the equipment identification has not been lost or stolen, Contractor must provide notice to Company via prior written notice of its removal. Company may take any steps necessary to recover its property and shall be entitled to deduct from Settlement and the Contractor shall be required to pay $50 per day for each day following termination for which identification is not returned.
9. Miscellaneous Termination of Agreement: The Parties further agree as follows:
a. This Agreement may be terminated with or without cause by either party upon ten (10) days prior written notice. Upon Contractors terminating this Agreement, he or she shall complete the transportation of any shipments accepted, and/or in transit, and perform all services required in connection herewith or be liable for any expenses or damages resulting from the failure to do so, including but not limited to reasonable attorney fees. Additionally, in the event that Contractor terminates this Agreement within ninety (90) days of the date the agreement is signed, Contractor shall be charged and agrees to pay Company Five Hundred Dollars ($500) as expense in setting up under 49 C.F.R. §§ 376, 391 and 13906, as well as terms of this contract undertaking this Agreement. Said charges, expenses or damages (including reasonable attorney fees) may be deducted from Settlements due or to come due to Contractor, including payment for freight in transit, and shall be paid subject to the terms of this Agreement. If Company must pay for completion of such services abandoned by Contractor, such payment will be subject to deduction from Settlements under this Agreement. The representations and obligations of the Parties shall survive termination of this Agreement for any reason. If Contractor fails to comply with the 10-day notice requirement, he/she/it shall be liable to Company in addition to all other charges hereunder, to the charges defined in Paragraph 14.
b. Termination under Paragraph 9(a) is made effective by mailing or delivering written notice to the other Party at its last known mailing address.
c. Except for the terms of Paragraphs 6, 7(c), and 13(a) and (b), under no condition will either Party be liable to the other for special or consequential damages of any kind.
d. In the event of termination of this Agreement by either Party for any reason, any agreements for rental of trailers from Company by Contractor shall be automatically terminated and due and owing amounts for rental shall be deducted from Settlements.
a. All wages, hours, working conditions, taxes, insurance, management, supervision, and all other aspects and requirements of any kind whatsoever related to the performance of this Agreement;
b. The utilization of the equipment under federal, state or local law, and as subject to the requirements of Schedule B;
c. The selection of all specific routes of travel; loading and unloading; all weighing and measuring of all loads, as required by law and by Company and its customers;
a. Cash Advances as may be made by Company to Contractor, and as determined in Company sole discretion, including fuel card usage for fuel expenses, roadside assistance or other needs;
b. For claims arising under Par. 7(g), Company withhold $2,500.00 from Settlement due or to come due in an open pending claim account until claims are verified and settled. If the claim is closed and no payment is made to a claimant by Company or its insurer, the amount held in the open claims account will be credited back to the Contractors Settlement account. Any dispute under this sub-paragraph shall be resolved under the process described in Paragraph 2.1 Disputes
c. Base plate, license and permit fees as may be required by federal and state statutes, rules, regulations, and multi-jurisdictional agreements; provided along with any administrative charges for obtaining said base plate and permits;
d. Insurance premiums for any insurance requested by Contractor and as purchased by Company;
e. Any federal or state taxes, fines or statutorily mandated employee insurance claims or benefits Company may be required to pay as a result of Contractor's failure to comply with the terms of Paragraph 6;
f.Fuel and use taxes, as determined by federal and state statutes and related rules and regulations, multi-jurisdictional agreements and Company use of computerized mileage systems;
g. Any other deductions or set-offs authorized by law, this Agreement or by Contractor in writing; and Contractor shall be liable to Company to the extent that any obligation under this Agreement exceeds the amount owing to Contractor.
a. Liability for Refused Shipments: In the event Contractor refuses to accept a shipment(s) after having agreed to transport the shipment(s), and as a result Company incurs losses consisting of the increase in cost of delivery between the amount it quoted to a shipper and the amount it would have paid Contractor, and the cost it actually paid another motor carrier or Contractor, then Contractor shall be liable to Company for such loss and additionally, Company may deduct said amount from any Settlement owing Contractor.
b. Prohibited Subcontracting: Contractor shall not assign, tip lease," broker, subcontract, interline, or otherwise arrange for the transportation of freight hereunder to any other carrier or third party, without the prior written consent of Company In the event of violation of this subparagraph, Company shall have the right to pay the delivering carrier or Contractor directly with no liability to pay Contractor. Additionally, the Contractor shall be liable to the company for all resulting damages sustained including, but not limited to, consequential damages and reasonable attorney's fees.14. Liability/Failed Delivery: In the event that Contractor fails to complete a trip, abandons a shipment, or otherwise subjects Company liability, directly or indirectly related to Contractors failure to perform or to perform adequately, Company shall have the right to complete performance in any reasonable manner or method, using the Equipment or any substituted equipment Company may charge Contractor for such costs, expenses, losses or damages including but not limited to reasonable attorney fees, incurred to complete performance, either directly or deducted them from Settlement due or to come due to Contractor.
a. Contractor shall comply with all applicable laws and regulations pertaining to operation of the tractor(s) and comply with all laws and regulations including but not limited to maintaining trailers whether obtained from Company or not, in good mechanical and working condition as well as performing pre-trip inspections, assuring current licensing, and current annual inspection reports prior to any use.
b. Contractor will keep its tractor(s) connected to trailer(s) furnished by Company and secure Company trailers(s) at all times unless an alternative security arrangement has been agreed upon in a prior written statement by Company contractor shall not use Company trailer(s) or other equipment for any other than Company authorized business except as otherwise provided by this Agreement, and shall maintain Company trailer(s) in good mechanical and working condition. If Company terminates this Agreement for any reason, any trailers rented by CONTRACTOR from Company must be returned to a location designated by Company at CONTRACTOR'S expense.
(a) Applicable Law: This Agreement shall be governed by the laws of the State of Arizona, unless preempted or controlled by federal law and regulations.
(b) Independent Contractor: The Parties intend to create by this Agreement an independent business relationship between Company and Contractor, and not an employer-employee relationship. Company shall, as required by law, provide Contractor with IRS Form 1099.
Neither Contractor nor its employees, agents, nor servants are to be considered employees of Company at any time or under any circumstances or for any purpose. Contractor acknowledges that its sole relationship with Company is as Company independent contractor under this Agreement, and that Contractor, by virtue of this Agreement, has no relationship with any third party, including without limitation any subsidiary or affiliate of Company.
(c) NI Agency: Neither Party is the agent of the other, nor shall either Party have the right to bind the other by contract or otherwise except as herein specifically provided(d) Material Breach: Except as otherwise provided herein, in event of a material breach hereof by Contractor, Contractor shall be liable to Company for all direct losses, expenses and costs incurred by Company including, but not limited to, reasonable attorney's fees; and as described in Paragraph 21 Disputes.
(e) Confidential Nature: The Parties shall limit disclosure of information concerning this Agreement and performance thereof, including Company confidential and proprietary customer information regarding rates, services or charges, to each other, or in a dispute resolution under Paragraph 21 Disputes, or to such other persons with a specific and legal need to know of this Agreement.
(f) Notices: All notices to the Parties shall be in writing and sent via U.S. Postal Service to the respective addresses within.
(g) No Solicitation: Contractor will not solicit business from Company customers; or otherwise interfere with the business relations of Company customers
(h) Entire Agreement: This Agreement, its schedules, and all documents submitted in order to obtain payment constitute the entire Agreement and understanding between the Parties and shall not be modified, altered, changed, or amended in any respect unless in writing and signed by both Parties. Headings are for convenience of Parties only and shall not be considered substantive or interpretive of meaning of any provisions herein. (I) Savings Clause: If any provision of this Agreement is held to be invalid, the remainder of the Agreement shall remain in force and effect.
(j)Force Majeure: if this Agreement is temporarily suspended during any period when a Party is unable to perform by reason of an Act of God or the public enemy, fire, flood, civil commotion, or any like event, events or occurrences beyond the reasonable control of the affected Party, neither Party shall have any liability to the other Party for delay in performance or failure to perform while this Agreement is temporarily suspended.
(k) Waiver: Waiver of any provision of this Agreement shall not be deemed continuing waiver of that provision or any other provision of this Agreement.
(I) Proprietary and Confidential Information: Restrictive Covenants
Protection of Company Proprietary and Confidential Information and Property. All business, client and accounting records, all paper and electronic documents: files, manuals, lists of clients and customers, lists of suppliers, computer programs and other materials of any type or nature, furnished to Contractor by Company or used by Contractor in the course of performing his/her services for Company (collectively, the "Business Records"), are and shall remain the property of Company Contractor acknowledges and agrees that the Business Records are confidential and are not readily accessible to Company competitors or to the general public, and agrees that he/she will not, at any time, either during or after his/her work effort, without in each instance obtaining the prior written consent of Company.
Management, disclose or make use of any Proprietary or Confidential Information except as actually required in the course of Contractor's performance of his/her duties for. Company
Non-Solicitation of Customers. Contractor acknowledges and agrees that Company devotes substantial time, money and other resources to marketing and selling freight transportation services and to developing and maintaining customers, whose identities and specialized needs constitute Proprietary and Confidential information. Contractor further acknowledges and agrees that his/her services for Company include establishing, maintaining, and improving relationships,with customers, prospective customers, and other Business Contacts on behalf of Company, and that following his/her separation from work effort with Company, for a period of two (2) years after the termination thereof (the "Non-Solicitation Period"), Contractor will not, directly or indirectly solicit or accept any freight transportation business, individually or on behalf of any other person, firm, company, organ;zation or entity, from any clients or accounts of Company.
Successors and Assigns: This Agreement shall be binding upon the Parties' heirs, successors and assigns, as permitted by law.
Signed Copy / Keep in Motor Vehicle: The Parties agree to sign an original and two copies of this Agreement Company shall keep the original, and Contractor will be given a copy. Contractor may utilize Schedule C as proof of Company operation under 49 C.F.R. § 376.11(c) (2) and keep Schedule C with the equipment at all times.
Disputes: In the event of a dispute arising out of this Agreement, the Party's sole recourse shall be as follows:
(a) The complaining Party shall give the other Party 10 day's written notice to cure any alleged default and if not cured,
(b) legal proceedings shall be conducted under federal and/or Arizona State court rules.
The decision of the court, sitting without a jury, shall be binding and final and the award of the court may be entered as judgment in any court of competent jurisdiction. The prevailing Party shall be entitled to recovery of all pre-litigation costs, collection costs, and expenses, and reasonable attorney fees, including those incurred pre-suit, as well as those incurred in any action for injunctive relief, or in the event further legal action is taken to enforce the award or judgment in any court.
Court proceedings shall be conducted locally in the Superior Court of Arizona in and for the County of Maricopa, provided, however, either Party may apply to a court of competent jurisdiction for injunctive relief.
Unless preempted or controlled by federal law and regulations, the laws of the State of Arizona shall be controlling. Any lawsuit arising from this Agreement shall be commenced not later than one year after delivery of prior detailed written notice of alleged default or be permanently barred.
interpretation: This Agreement shall be construed, interpreted and enforced in a manner consistent with 49 CFR § 376.2, 376.11 and 376.12 and in event of conflict with the terms of this Agreement, the cited regulations shall be controlling.
Recitals: The Recitals above are contractual as well as recital.
Voluntary Agreement: Contractor acknowledges and agrees that he/she/it has had sufficient time to carefully review the contents of this Agreement, he/she/it understands and agrees with the contents hereof, he/she/it has signed this Agreement as his/her/its free act and deed, and that he/she/it has had sufficient opportunity to obtain and consult with his/her/its own counsel.
The Contractor Agreement between me and Company is written in the English language. I have read and understand the provisions and have signed the Contractor Agreement dated, January 25, 2025
In WITNESS WHEREOF. theParties here to have executed this Agreement as of the date first set forth above.
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