Spell Out Terms of Service to Avoid Misunderstandings ... or Worse

A ‘terms and conditions’ document is necessary to help you get paid on time, stop customer conflicts and avoid legal entanglements

Spell Out Terms of Service to Avoid Misunderstandings ... or Worse

Jeff and Terri Wigley

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Question: I would like to ask about “terms and conditions” for my company. What are some suggestions as to points to include? How do I convey these terms to my customers?        

Answer: This is a very important topic and one for which you should seek qualified, legal advice after reading the suggestions in this column. If you have not done so in some time, it is appropriate to review your company’s legal relationship with your customers. The beginning of a new year is an excellent time to initiate new policies.

We have gathered some suggestions obtained throughout the years from several different PROs. Please review these ideas, determine if they are applicable to your business and then have a lawyer review your list.

What are terms and conditions? This is an agreement between you and your customer. These are the conditions under which you agree to work together. Also referred to as “terms of service” or a “service agreement,” this is an important document. If you do not have one, you will want to put one in place immediately.

Here are some suggested terms to include:

Date of agreement – When do the terms begin and when do they end? Consider giving this document to the customer upon delivery of the unit. Some PROs have the job superintendent sign the form, while others email it to the customer’s office.

Care of your property by the customer – Make sure to include verbiage whereby the customer agrees that they are in possession of your property and they will treat the unit as rental equipment. The customer should respect and treat rented portable restroom equipment in the same way they treat their rented job trailer or other construction tools and equipment.  

Position the property where it can be serviced – What better time than at the beginning of the job to avoid the headaches of units being blocked on the day of service? As with many items in your terms and conditions, these instructions take the emotion out of this issue before a problem arises.

Customer agrees not to overflow unit and to use it for its intended purpose – This addresses the issue of the customer dropping unused paint, oil and other foreign substances in the unit. You cannot pump such substances, so stating this upfront could avoid future problems.

Customer agrees that the liquid waste is not hazardous or toxic and is in compliance with state and local laws – This type of verbiage also shows the local wastewater treatment facility that you demand compliance from your customers in terms of pumping only portable restroom waste.

Customer agrees not to sublease your property – You are working with a specific company and they have agreed to your terms and conditions. Your customer should not sublease to another party who would be unknown to you.

Billing considerations – What is the billing cycle (28 days, monthly)? Do you charge tax? Are there delivery and pickup charges? Are there emergency charges? Weekend charges? Are there damage charges if the customer inflicts damage on the unit during the rental period? Billing is an area where you should be upfront and clear with your customer to avoid any issues in the future. You show that you have integrity and there are no hidden charges in your billing system.

Payment terms – State that billing terms are “net 30,” “cash on demand” or whatever your company has determined. Again, once this is stated, you will avoid questions and conflicts.

Invoice delinquency – Do you charge a late fee? Is the late fee a fixed amount or is it a percentage? Motivate your customer to make timely payments.

Price changes – Are prices subject to change with advance notice? How much advance notice is required? This gives you the flexibility to alter prices should there be a dramatic increase in your costs (e.g., fuel prices, toilet paper, the cost of plastic raises the price of new units).

Indemnify and hold harmless – This is where your lawyer will be most helpful. In some states, there is a legal disclaimer that may read: “Customer agrees in all events to indemnify and hold harmless (the restroom provider) in respect of any and all claims or suits made or filed against your company for bodily injury and/or property damage resulting from the rental of the (portable sanitation) equipment.” Ask your attorney if such a clause is legally binding in your state or municipality. If there are merits, this one legal element in your terms and conditions could be of help to your business.

FINAL THOUGHTS

PROs need adequate, descriptive and legally binding terms and conditions and effective ways to communicate these points to customers. One effective method is to include them on the reverse side of all invoices. The repetition of this method ensures that multiple copies would be on file at the customer’s location. As previously discussed, other PROs have the job superintendent sign the terms upon delivery of the initial unit. Regardless of the delivery method you choose, be consistent in distributing your terms and conditions, and by all means, seek legal advice before you implement them.

If you would like to share suggestions about this important topic, please let us know and we will include the information in a future column. 



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