Putting into practice your obligation to ensure, so far as reasonably practicable, the safety of your transport activities typically extends to ensuring that your transport contracts include terms requiring mutual compliance with the Heavy Vehicle National Law (HVNL) and escalation procedures to address contraventions of such obligations.
In this article, we look at terms which you can include in transport contracts to support your and others’ compliance with the HVNL.
There are certain staples of transport contracts today that are used to support the contracting parties’ compliance with the HVNL. They include:
- broad statements that both parties will comply with HVNL obligations
- warranties that each party will not ask or require the other party to do anything that would cause the other party or its employees to breach the HVNL
- escalation procedures
- escalation procedures are contract essentials in circumstances where HVNL obligations are ongoing and where instances of one party breaching HVNL requirements can potentially expose another party to prosecution
- moreover, lessons from sentencing under the HVNL tell us that penalties tend to be higher if you do nothing when you are on notice that your business partner (e.g. another party in the Chain with whom you jointly conduct transport activities) frequently breaches the HVNL when providing services to you. Including escalation procedures in contracts are a way to respond to such risks.
Terms providing escalation procedures include:
- obligations for a party to notify the other if it suspects a contravention or actually contravenes the HVNL during the course of performing the contract and any remedial steps that the party takes
- entitlements for a party to refuse to provide transport services if performance would result in it breaching the HVNL
- entitlements for a party to terminate a contract for convenience if there is a breach of the HVNL during the course of the parties’ dealings with each other or if there is an HVNL prosecution commenced against another party.
Whether a party exercises this option is discretionary. For example, a party may see commercial value in continuing contractual arrangements with another party which notifies it of a minor breach of the HVNL which has been promptly rectified.
Contract basics will often be backed-up by optional terms which include:
- obligations for a party to comply with another party’s HVNL compliance policies and procedures – requiring compliance with Chain of Responsibility (CoR) policies and procedures can be a useful tool to ensure uniform approaches to satisfying HVNL requirements (in particular where transport activities may be jointly conducted or the transport activities of one party interlock with those of another party) and to share compliance resources where you are dealing with parties that don’t typically have sophisticated HVNL compliance resources at their disposal. For example, a transport services provider who deals with small business consignors or consignees might want to include a term for their customers to comply with its HVNL policies and procedures to ‘plug’ a potential HVNL knowledge gap in that supply chain and prevent those consignors from consigning non-compliant loads for transport. By sharing procedures detailing matters such as packing, restraint or weight requirements for packages, the transport services provider can ensure that goods which it collects are prepared for transport in a manner that means that the transport services provider is not likely to breach its own obligations when providing transport services for those goods
- terms setting out specific procedures to achieve compliance with the HVNL as they relate to the services supplied or acquired by the parties – CoR parties cannot contract out of their HVNL obligations. However, they may want to include terms that clearly set out how they want to address compliance with HVNL obligations as they arise in the parties’ dealings with each other. For example, a transport provider who regularly collects goods from a customer may want to include terms in its contract that:
- require the customer to weigh the goods and provide a docket detailing the weight of the goods before collection so that the transport provider can in turn seek to comply with its own mass obligations under the HVNL
- require the customer to pack goods in a certain manner to support the transport provider’s subsequent compliance with its own restraint obligations
- entitle the transport provider to refuse to collect goods if the customer does not provide the weight of the goods or pack them in the appropriate manner.
Why include HVNL obligations in contract terms?
You don’t need your contracts to include HVNL obligations for such obligations to apply to both parties. However, including HVNL obligations in contracts does the following:
- signals to your business partners (other parties in the Chain) and the regulator that you require compliance with the HVNL in your business practices
- gives you contractual recourse against business partners (other parties in the Chain) where they fall short of their HVNL obligations and would otherwise potentially expose you to the risk of penalty or prosecution.
Your contract terms may not save you from a prosecution under the HVNL if your conduct ultimately contravenes the HVNL. However, contract terms do provide scope for you to:
- add opportunity to discuss with your business partners contraventions of the HVNL and to give them warnings about their conduct
- terminate a transport contract if appropriate
- seek compensation where another party breaches HVNL-related obligations to you causing you loss or damage. For example, if a transport provider relied on misinformation in a weight docket provided by a consignor that resulted in a truck rollover then that might give the transport provider scope for action against the consignor.
Author: Rebecca Niumeitolu
- This article was originally published in CoR Adviser. The article is © 2020 Portner Press Pty Ltd and has been reproduced with permission of Portner Press.
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this newsletter is accurate at the date it is received or that it will continue to be accurate in the future.