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Sugar Land Personal Injury Lawyer > Blog > Car Accident > Getting Around the Graves Amendment

Getting Around the Graves Amendment


Although most car crash victims have never heard of the Graves Amendment, this federal law could significantly affect the amount of compensation they receive, especially if the tortfeasor (negligent driver) was operating a U-Haul truck, Avis rent-a-car, or other rented vehicle. 49 U.S. Code § 30106 restricts the negligent entrustment rule, which usually applies in these situations.

Briefly, negligent entrustment applies if an owner allows an incompetent operator to use his/her motor vehicle and that incompetent owner causes a car crash. Evidence of incompetence usually includes a poor driving record, previous at-fault collisions, and an invalid or safety-suspended drivers’ license. Significantly, victim/plaintiffs must also prove the owners knew the drivers were incompetent.

Vicarious liability theories like negligent entrustment are just one reason vehicle collision matters are very complex. So, only the most experienced Sugar Land car accident lawyer can obtain maximum compensation for economic losses, such as medical bills, and noneconomic losses, such as pain and suffering.

What is the Graves Amendment?

As mentioned, most people have probably never heard of this obscure federal law. So, before we break down how a Missouri City personal injury lawyer can get around this law, we should probably break down the law itself.

In the late 1990s, juries in several states ordered Enterprise and other vehicle rental companies to pay large judgments after they rented vehicles to reckless drivers who caused crashes. One case, a brutal fireball collision in Connecticut, ended with a multi-million dollar judgment.

Rather than change their business practices, these companies threatened to pull out of certain states. So, Rep. Sam Graves, a Missouri Democrat, introduced a policy rider to a large transportation bill. The Graves Amendment shields U-Haul and other vehicle rental companies from negligent entrustment liability, if certain conditions apply.

Graves Amendment Loopholes

Usually, a “loophole” means a hidden way around a certain law or requirement. But in this case, the Graves Amendment loopholes are in plain sight. According to the brief and poorly-drafted Graves Amendment, negligent entrustment immunity applies if:

  • Not Otherwise Negligent: The immunity deal is off if the vehicle owner or agent was negligent during the rental transaction. Negligence could be ignoring the industry standard, which includes verifying drivers’ license information. A mere visual inspection is no longer adequate. Nowadays, vehicle renters must, at the least, verify that the drivers’ license is legally valid.
  • Trade or Business: Graves Amendment immunity is available to renters who are in the trade or business of renting motor vehicles. The Graves Amendment does not define this phrase. The Uniform Commercial Code defines “merchant,” a similar term, very narrowly. For example, a merchant deals mostly with one good or service. Most U-Haul dealerships are moving supply companies that happen to rent a few trucks on the side.

Victim/plaintiffs must still prove knowledge to establish a negligent entrustment case. But frequently, rental companies look the other way if an incompetent driver with a valid credit card wants to rent a car or truck.

Work With a Dedicated Harris County Attorney

Injury victims are entitled to significant compensation. For a free consultation with an experienced personal injury attorney in Missouri City, contact the Henrietta Ezeoke Law Firm. We do not charge upfront legal fees in these matters.



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