Legal Term
Owner-Operator Agreement
Legal Definition
A legally binding contract between a motor carrier (trucking company) and an individual who owns and operates their own commercial vehicle, establishing an independent contractor relationship for the transportation of freight, where the owner-operator bears all business expenses and is compensated based on revenue sharing or per-load rates.
In Plain English
This is an agreement where you use your own truck to haul freight for a trucking company, but you're not an employee—you're self-employed and pay for your own fuel, repairs, insurance, and other costs.
Example in a Contract
Section 5. Compensation and Expenses: Owner-Operator shall receive 68% of the gross revenue generated from each assigned shipment. Company shall deduct a 4% administrative fee and any pre-paid advances from Owner-Operator's compensation. Owner-Operator is solely responsible for all operating expenses, including fuel, maintenance, insurance, licensing, and compliance with federal and state regulations. Company shall provide dispatch services but bears no liability for Owner-Operator's equipment or operational decisions.
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