Terms of Service refinement

[ritsukaao.livejournal.com]

Hi all! This isn't really a post for me but for my wife whom I'm helping to make a TOS for her new craft business. One of the parts I'm struggling to word is a policy for repairs and defective products as well as her refund policy. In short, it's like this:

If a product arrives damaged or is defective in some way that was not made aware before shipping out, the buyer has two weeks from when it arrives to get in touch with my wife to discuss repairs. If the repairs are reasonable in that they don't cost the same price as the product to fix, the repairs will be made at no cost and the item will be shipped back. However, if the price of repairs is equal or greater than the original purchase price, a refund will be issued for that amount and my wife will keep the product to either sell at a loss or use for parts.

My wife also plans to only start work when the full amount for the product is received to minimize wasted time/money/effort if a buyer doesn't pull through. However, things can happen and a refund policy is essential. Her idea was if the supplies were bought but the project not started, they get all but 15% of their money back. If the project was already started, they would get all but 20% of their money back.

Do these terms sound reasonable? The products she's selling are no less than $160 and do have mechanical parts/LEDs that can be finicky.

Comments

[amocin.livejournal.com]

I think the TOS should read from your wife's POV rather then yours, as it is her product. Or just use the royal "We" as it sounds more business professional.

On a side note, if this item is shipped to the customer, and is broken on arrival, are you stating that they wont get it fixed if it costs too much to fix? I think there needs to be clarification on that, as repairs should be made if the content is broken before they get it, and returned at no cost to the buyer.

I think overall there needs to be clarification on what events will the customer have a free repair or refund, and in what case do you take responsibility for the repair, or the customer takes responsibility for it.

[ritsukaao.livejournal.com]

Ack! I'm really bad about doing POV but will clear it up in the final draft of the TOS. It's most likely going to be "I" instead of "We" but that could change since this is more her business than mine (or ours).

I could also use some help with clearing the repair thing as well. My wife has already stated that insurance will be required for all items and if that doesn't apply to the situation and the item arrives broken, it will be fixed or replaced entirely since the buyer had nothing to do with the damage purposely or accidentally. My wife will foot the shipping of the broken item to be returned and for the new item to be sent.

I guess where I'm confused is of how to make clarify certain specifics, given the nature of the item, there is a lot of room for the buyer to damage it from typical use. Let me go ahead and clarify that these are working lightsabers from Star Wars; so you see what I mean when I'm hesitant to include specifics as I don't want to assume anything on the buyer's part.

[amocin.livejournal.com]

It would help if you separate the repair/replace policy by a paragraph of "In the event it arrives broken." and then the next one "In the case where customer broke it." It will help keep things clear.

[jakejynx.livejournal.com]

You can say that repair, replacement, or refund will be made "at the discretion of the artist." This means that it's really in your wife's hands what action she'd like to take.

[jakejynx.livejournal.com]

Also, I think the 15-20% thing seems reasonable, but only if the parts and materials she has purchased are not reusable and interchangeable on other products. I don't know the specifics of things, but the proper thing to do would be to consider what percentage of the materials is NOT reusable/interchangeable and figure out the cost percentage of that. Add a bit extra on for the hassle, and use that as your percentage kept.

[sableantelope.livejournal.com]

If you're working under a custom item contract you can automatically keep a deposit(check country/state for amount percentage), no need for it to be explicitly stated in contract- it's just part of custom item contracts. This is only if the buyer cancels, though.
If wife cancels she must fully refund whether she has a use for the purchased materials or not.
Also can't keep deposit and cost of materials, no double dipping.

If you do payment plans make sure and have in your contract the dates payments are due and amounts of each payment. Don't budge on these! But check your state/country for the mandatory grace period for payments(usually 72 hours) and how many missed payments have to happen(usually 2) before you can consider the client in breach and are allowed to dissolve with a partial refund + keeping deposit.
Having this in your contract helps prevent 'abandoned' deals where you lose contact with your client.
If they disappear offline and dates of payments go by you can legally dissolve with the ability to keep the deposit when otherwise you would get penalised as being the one who cancels.
(so you contract is part/schedule A is buyer's agreement + part/schedule B is payment plan details. Make sure the buyer and you initial the payment plan along with the signatures )

Contracts are important to both protect yourself legally if a dispute comes up regarding product details and product delivery or payment, but also to put yourself in the best legal advantage.(in this case for examples you can set up a way not to forfeit the deposit if the buyer drops contact)

If you aren't sure on doing sign/scan method of contracts(since most people don't have access to faxes anymore) you can look it up or I can clarify. Just remember you do have to mail or fax a hardcopy at the end of sign/scan process.

If a product arrives damaged or is defective in some way that was not made aware before shipping out, the buyer has two weeks from when it arrives to get in touch with my wife to discuss repairs. If the repairs are reasonable in that they don't cost the same price as the product to fix, the repairs will be made at no cost and the item will be shipped back. However, if the price of repairs is equal or greater than the original purchase price, a refund will be issued for that amount and my wife will keep the product to either sell at a loss or use for parts.


Okay seems decent. Double check to make sure you don't have to legally give 30 days to ask for repairs as opposed to two weeks. Be sure and mail things in a way that the arrival date can be verified for the purpose of asking for repairs. (ie: have to be signed for)
Make sure you include the repair info in your contract and who pays shipping to return an item to you. That can make a client go sour fast if they end up saddled with the cost of mailing something back for repairs, which happens, but not great for small craftspeople who word of mouth can do real damage to business.

Be sure and have a window for repairs. As in once you receive the defective item you will return it withing two weeks, a month, whatever.

Honestly the warranties are not something I have drafting experience with.
I'm going to suggest reading up on it. (I'll have to do the same before I can give more detailed advice on warranty)
I think you can stick it as a paragraph of the buyer's agreement and just make sure you both initial it along with overall signature on sched A.

I'm a little worried since I'm getting a vibe that you both haven't much basic contract law. Maybe take a read through some primers on 'what makes a contract' and 'why and how contracts dissolve/breach'- just so you come in to business on sturdy ground.

Worry more about a good contract and less about a TOS. TOS never replaces a contract.
TOS is like a heads up to the client on your business practices/what you will and wont do they can make a diligent/informed decision on hiring you.
Contracts nail down the details for each client- ie- product description in the buyer's agreement, payment dates and amounts in the payment plan schedule- and solidify the deal.


I can go into more detail on anything specific if you have specific questions.

[sableantelope.livejournal.com]

Okay just read your replies. Since you have to clarify user damage versus arriving broken I'm going to change my warranty advice and say you separate that into part C of the contract, detailing what is 'excessive use' repairs that you don't do, versus manufacture defect/damage in transit repairs that you do cover.

Also going to emphasise that this kind of detail is not for a TOS, though it's fine to stick it in if you want, it's the kind of stuff to be hammered down in a contract!!
I wish people wouldn't try and TOS what needs to be in contract.

And just a reminder you can't just email a contract and be like 'hey did you read this?', you have to do scan/sign + hardcopy mailed, or if access to fax, faxing it.

Yeah, it's more work, but it's good business and will save you trouble down the road(just read this community back a few years and all the myriad off problems that happen and the stress of that- and now realise that 99% of those could have been prevented/solved by having a decent contract in place).

BTW I don't mind helping jot a basic Buyer's agreement and contract for you. But *****~-_disclaimer_-~****wooohoooooooodisclaimersirenoooooo it would be provided not as a legal document, just starting point for a working contract. ;)

[familliaraver.livejournal.com]

Here is the thing. If you are conducting business through paypal or Ebay or Etsy something like that, their terms of service and how disputes are handled are going to override your terms of service.

If a customer gets an item and they paid in full for it, decide they don't want it or it's broken or it's not as described or whatever other excuse they have and they go to Paypal, they don't care about your terms of service. They will refund the full amount or freeze the money, the item will get shipped back to you, and the customer will get the full refund.

If they paid with a credit card, the credit card company cares even less about your terms of service. They take money first and ask questions later.

I would really really really encourage you to read through the terms of service of the services you use or take money order only and make your own rules.

it's good to have your own rules and it's excellent to have a terms of service but when deals go south you need to know how much protection paypal offers and how to protect yourself.