Terms of Business: DIY vs pay for bespoke terms

I’ve been asked this a lot this week. People who haven’t got their own terms, tell me they’ve take “a paragraph from here and a paragraph from there” to for their terms.  Is this sensible?

DIY terms, what do you need to look out for?

First – if you don’t understand why need terms, please read this blog first. If you are still unsure about what company entity you are going to be then you can find help here. Now that we’ve covered off 2 of the basics, let’s break down this question.

1 – Are the places you are the paragraph from doing providing the exact same product and service as you?

If they are then this may be a sensible place to start, but are you sure that you want to offer the same level of cover / liability / commitment / do your customer’s have the same level of trust with you as their customer’s do with them? If any of these are different then their wording may not be right for you and your customers.

2 – Do you have the same level of insurance as the place you’re taking the paragraph from?

Do you know what insurance they have? Do you know what sort of cover their terms are referring to ? Do you know if your cover is for the same type of occurrences of claims? Can you be certain if insurance is referred to in a clause your insurance covers you for that type of claim and up to the value being quoted? If you can not answer YES to all of these questions, then copying that paragraph or clause maybe isn’t right for you.

3 – Payment terms

If you are copying anything to do with payments terms, you have to ensure that the phrasing you are copying matches your own payment terms. If it mentions placing companies on stop – is this something you are prepared to do, will you actually follow through with it?

If what you are copying states “we reserve the right to pass to external collection services without further notice” is that the action you would want to take? If it states that the supplier reserves the right to take something down, would you actually do it?

Payment terms and consequences of not receiving payment have to agree with how you are going to RUN YOUR business NOT just copying how someone else would treat their customers.

4 – Transportation agreements and warranties who has damages for breakages?

If the sections you are copying talk about liability for breakages, do you accept the same responsibility? Can you pass any of this on to the transportation company or is it your sole responsibility? Do they have a different contract with their transportation firm, is that why they have included this? Whose responsibility do you want it to be once the goods have been shipped?

5 – Terminology does it make sense?

Do you understand the meaning of everything in the clauses you are copying? If you can’t answer yes to this, then you shouldn’t be using that clause as you don’t know what you are agreeing with your customer.

6 – How long ago were the paragraphs you are copying written?

This is massively important to know. What has changed since the ones you are copying were written? Do your research and find out if the the elements they state as facts are still relevant today.

7 – Legislation

This follows on nicely from point 6 – has any legislation changed since the one you are copying? Is any legislation quoted the most up-to-date one? Has Europe imposed anything since the time these terms were written? Is there a code of conduct you need to include that isn’t in there? Again here you need to take time to make sure you research to ensure that all of this information is still correct.

Summary

Yes you can use “a paragraph from here and a clause from there” providing you ensure

• Any products or services relate exactly to what you provide
• It correlates to the payment terms and consequences of late payment you use with your customers.
• You happy that you have the correct insurance cover to align with the terms you are sending out
• You understand fully what you are sending out
• The clauses you are copying are still relevant today
• The legislation included is correct and up to date
• They fit with your ethos and your values

Remember these are your legally binding terms, you are sending them to your customers, makes sure they are right for YOU.