Carmack Amendment

There are many things that can go wrong in the shipment of goods from one state to another. Things can get lost, damaged or stolen. The Carmack Amendment is a federal law (passed way back in 1906) that attempts to establish a uniform policy of liability. In other words, it lays out a method to determine who is at fault if something goes wrong. Otherwise, regulations could be different in every state.

The Carmack Amendment also limits liabilities of the freight company to the value of the loss or damage of the goods, not pain or suffering or anything else. However, the carrier is off the hook if it can be proven the damage was caused by something outside its control, such as an act of god or thieves.

So let's say Don't Break My Glass Inc. needs to ship 100 windows worth $30 each to a customer in Chicago. The windows are carefully loaded onto the truck and both the Don't Break My Glass warehouse person and the truck driver of We Never Damage Anything Inc. inspect the windows to make sure everything is in good shape. Both make notes to this effect on the shipping documents. On the way to Chicago the truck driver falls asleep at the wheel and hits a tree. Fifty windows are damaged so Don't Break My Glass can file a claim for $1,500 (50 x $30) against We Never Damage Anything. If the trucking company denies they were responsible for the damage or questions the value of the windows, Don't Break can take them to court.