Broker And Carrier Agreement Template for the United States

A Broker And Carrier Agreement is a legally binding contract that establishes the working relationship between a freight broker and a motor carrier for transportation services. This agreement is essential for anyone operating in the freight and logistics industry, as it ensures compliance with federal regulations while protecting both parties' interests. The contract defines roles, responsibilities, payment terms, and operational procedures that govern how freight will be moved from origin to destination.

When do you need this document?

You need this agreement whenever establishing a business relationship between a freight broker and motor carrier. This includes situations where brokers are building their carrier network, carriers seeking to work with new brokers, or existing partners formalizing their working relationship. The agreement is particularly crucial when expanding operations across state lines, as it ensures compliance with interstate commerce regulations. You'll also need this document when insurance providers or financial institutions require proof of formalized carrier relationships, or when preparing for FMCSA audits that examine broker-carrier contractual arrangements.

Key legal considerations

Several critical legal elements must be addressed in your agreement. Operating authorities are fundamental-both parties must maintain valid FMCSA licenses, with brokers holding MC numbers and carriers maintaining DOT numbers. Insurance requirements are strictly regulated, including minimum auto liability coverage, cargo insurance, and broker bond or trust fund requirements under BMC-84 or BMC-85 provisions. Payment terms should comply with federal prompt payment standards, typically requiring payment within 30 days unless otherwise agreed. Liability allocation clauses must clearly define responsibility for cargo damage, delivery delays, and regulatory violations. The agreement should also address indemnification provisions, dispute resolution procedures, and termination conditions to protect both parties from potential legal exposure.

Legal requirements in United States

Federal Motor Carrier Safety Administration regulations provide the primary legal framework governing these agreements. Under 49 CFR § 371, brokers must maintain written agreements with all carriers they utilize, and these contracts must include specific mandatory provisions. The agreement must reference applicable parts of 49 CFR, including safety regulations under Part 390 and financial responsibility requirements under Part 387. MAP-21 legislation has strengthened broker bond requirements, now mandating $75,000 minimum bonds or trust funds. State-specific requirements may apply depending on operation locations, particularly regarding workers' compensation and state-level transportation permits. The Uniform Commercial Code governs contract formation and performance standards, while interstate commerce regulations ensure consistent application across state boundaries. Proper documentation of carrier vetting, including safety ratings and insurance verification, is legally required and should be referenced within the agreement framework.