diff --git a/chapter12.md b/chapter12.md
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--- a/chapter12.md
+++ b/chapter12.md
@@ -1 +1,86 @@
+## Chapter 12: Creating Custom Tools
+LangChain allows you to create your own custom tools and incorporate them into your agents.
 
+```
+from langchain.agents import Tool, AgentExecutor, LLMSingleActionAgent
+from langchain.prompts import StringPromptTemplate
+from langchain import OpenAI, SerpAPIWrapper, LLMChain
+from typing import List, Union
+from langchain.schema import AgentAction, AgentFinish
+
+
+class CustomPromptTemplate(StringPromptTemplate):
+    template: str
+    tools: List[Tool]
+    
+    def format(self, **kwargs) -> str:
+        intermediate_steps = kwargs.pop("intermediate_steps")
+        thoughts = ""
+        for action, observation in intermediate_steps:
+            thoughts += action.log
+            thoughts += f"\nObservation: {observation}\nThought: "
+        kwargs["agent_scratchpad"] = thoughts
+        kwargs["tools"] = "\n".join([f"{tool.name}: {tool.description}" for tool in self.tools])
+        kwargs["tool_names"] = ", ".join([tool.name for tool in self.tools])
+        return self.template.format(**kwargs)
+
+
+def random_word(word: str) -> str:
+    return f"A random word related to {word} is: example"
+
+
+search = SerpAPIWrapper()
+tools = [
+    Tool(
+        name = "Search",
+        func=search.run,
+        description="useful for when you need to answer questions about current events"
+    ),
+    Tool(
+        name = "RandomWord",
+        func=random_word,
+        description="useful for when you need a random word related to a given word"
+    )
+]
+
+
+prompt = CustomPromptTemplate(
+    template="Answer the following questions as best you can. You have access to the following tools:\n\n{tools}\n\nUse the following format:\n\nQuestion: the input question you must answer\nThought: you should always think about what to do\nAction: the action to take, should be one of [{tool_names}]\nAction Input: the input to the action\nObservation: the result of the action\n... (this Thought/Action/Action Input/Observation can repeat N times)\nThought: I now know the final answer\nFinal Answer: the final answer to the original input question\n\nBegin!\n\nQuestion: {input}\nThought:{agent_scratchpad}",
+    tools=tools,
+)
+
+
+class CustomOutputParser:
+    def parse(self, llm_output: str) -> Union[AgentAction, AgentFinish]:
+        if "Final Answer:" in llm_output:
+            return AgentFinish(
+                return_values={"output": llm_output.split("Final Answer:")[-1].strip()},
+                log=llm_output,
+            )
+        regex = r"Action: (.*?)\nAction Input: (.*)"
+        match = re.search(regex, llm_output, re.DOTALL)
+        if not match:
+            raise ValueError(f"Could not parse LLM output: `{llm_output}`")
+        action = match.group(1).strip()
+        action_input = match.group(2).strip()
+        return AgentAction(tool=action, tool_input=action_input, log=llm_output)
+
+output_parser = CustomOutputParser()
+
+# LLM
+llm = OpenAI(temperature=0)
+llm_chain = LLMChain(llm=llm, prompt=prompt)
+
+
+tool_names = [tool.name for tool in tools]
+agent = LLMSingleActionAgent(
+    llm_chain=llm_chain, 
+    output_parser=output_parser,
+    stop=["\nObservation:"], 
+    allowed_tools=tool_names
+)
+
+
+agent_executor = AgentExecutor.from_agent_and_tools(agent=agent, tools=tools, verbose=True)
+agent_executor.run("What's a random word related to 'programming'?")
+```