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TIPS AND TERMS

or . . . how to provide basic protection against bad debt.

Terms of Trade (aka Terms & Conditions of Sale, et al) provide the basic contract within which the wary printer trades.

If you don’t have Terms you are like the Knight of old, entering the Lists without armour - you are likely to lose the majority of your battles!

There are several versions of ‘model terms’ for the Print Industry and, as one might expect, they seek to be all things to all Printers and thus are very long and wordy!  Obviously they frighten a lot of Printers off because, at ICSM, we often have to try to resolve debt problems where our Clients have inadequate (or even no) Terms.

Your Terms should have certain clauses included, regardless of the nature of your work or your attitude to legal jargon.  The main types of clause are:

General - the clause that starts off most sets of Terms and says basically that your Terms are the whole contract and that they take precedence over any conflicting Terms in the customer’s purchase order.  You can enforce your Terms by sending an Order Acceptance letter every time you receive an order.

Controlling - clauses enable you to tell your customer the bases upon which you wish to trade.  The most important of these relate to payment!

‘Payment is due within 30 days from the date of our Invoice’ - or, if you are more generous - ‘Payment is due by the end of the month following the month of invoice’.  Note the words in Italics.   An invoice becomes due on the day it is issued and overdue one day outside Terms.

Other Controlling Terms can relate to Proofing; to changes to copy not due to Printer Error or to any other circumstance or situation which, if not pre-handled, could lead to a dispute which delays or reduces payment.

To illustrate this, a paper or ink supplier might reasonably stipulate a shelf life for his product, beyond which no guarantee of performance exists.  The Printer can require his customer to a) report alleged defects within N days of receipt of the job; and b) demand the return of all the queried work before entertaining any claim for reprints or credits.

You can decide what Controlling Terms you need if you consider the problem situations in which you have found or could find yourself with your particular market and your particular customer base.  Wherever you are or could be vulnerable you should seek to control the situation with a suitable clause or clauses.  Always remember that any Terms you decide to adopt should be checked by an appropriate solicitor to make sure that they will stand up in court - if you have to go that far.

You are advised to consider a Time clause - basically stating that Time is not of the essence in the contract, so that if you fall behind schedule that, in itself, does not entitle your customer to withhold all or part of your payment.


Disclaimers - are clauses which state that, whatever goes wrong, it's not your fault!

Force Majeur is a good example.  This clause states that you cannot be responsible for anything that goes wrong unless through the proven negligence of your personnel.  Normally used to excuse acts of God, War, Terrorism or Industrial Dispute, it can be extended to cover failure by suppliers and other less esoteric problems.

Copyright is another sensitive area.  You should have a clause shifting all any responsibility for challenges to copyright straight back to your customer.

Unprintable work.  In Print it is not uncommon for a customer to require something that is not practical.  E.g., printing onto unsuitable material or printing an inadequate image.  Your Terms should reflect the responsibility for that work back to the customer - but it is important that you have advised him in writing prior to running the job that there is a potential problem and we would advice you getting him to sign a letter confirming his willingness to pay even if the job does bomb out.


Making your Terms work.

You must ensure that your customer has the opportunity to examine your Terms prior to commencement of the order!

We have lost claims in the past because customers have been able to claim that they have not seen the Printer’s Terms and therefore cannot be bound by them.  You can overcome this ploy in the following ways:

Firstly, refer to your Terms in every quotation or estimate that you send out.  If your Terms are too long to print on the back of your letterheads, include the phrase ‘this estimate (quotation) is subject to our standard Terms of Trade, a copy of which is available upon request’.  This places the onus on the customer to request a copy.  If he does not do so his position is significantly weakened.

New account applications should be asked to complete a Credit Account Application Form, which should be signed by ‘an authorised signatory’ and should include an undertaking to pay you within Terms.

Don’t rely upon comments upon invoices about payment terms.  The invoice follows performance of the contract and you cannot impose Terms upon the other party once performance has been effected if you have not previously notified them of those Terms.


For further information contact us:
      tel: 0844 854 1850
      email: icsm@icsmcredit.com


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