Question:
Ken,
We recently purchased a contract off your website and have been extremely happy with its content and our customer's response to it. I read your e-mails whenever they come to my inbox and always close the e-mail a little smarter than when I first opened it. The last e-mail I saw reminded me of a question that is always burning in my mind whenever a homeowner requests cancellation of their system. What constitutes a legally binding cancellation? Is an e-mail sufficient? In this day an age some customers cannot be bothered with actually typing a letter and signing it, and insist on an e-mail cancellation. A few customers have refused to send any notice to us (they assume verbal notice should be sufficient) and after many attempts by my company to either receive a letter from the homeowner or payment for our service, we eventually cancel them after a series of certified letters. What if the customer been on vacation in Europe for three months, and after frequent attempts at collecting and contacting the customer with no response we terminate the service due to non-payment, can the customer then return and file claim that we cancelled without their consent? What if their home gets broken into the day after we cancel a service due to non-payment non-contact and now we are liable?
Any answers on this issue would be much appreciated.
Thanks for all your great e-mails,
Katie Quinn
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Answer:
Your question presents two scenarios. First, if the cancelation is within 3 days of the sale, and you have furnished the cancelation form notice, then the contract is terminated and you must refund any money you received. The buyer must return any equipment you furnished. I do not suggest starting any work within the 3 day period unless you get a waiver. Some states permit the buyer to waive the 3 day cooling off period if the waiver is hand written by the buyer and signed by the buyer, usually on a paper separate from the contract itself. You are in Connecticut and the cancelation procedure is on my web site at http://www.kirschenbaumesq.com/noc- connecticut1.htm The statutes for all states are posted on the web site.
Once the 3 day cooling off period is over the buyer does not have the right to cancel, at least not without being responsible for the damages called for in the contract upon the subscriber's breach. If a subscriber notifies you that you are to terminate service, or that they are terminating the contract, you can discontinue your service and communicate with the subscriber what the subscriber's responsibilities are to you. Those subscriber obligations will be found in your contract, which will have specific provisions. Where contracts are for recurring revenue there is term of years and an 80% liquidation provision for damages. The contract will also have a provision permitting you to discontinue service in the event of the subscriber's default. I suggest some notice, even if the contract does not require it, which normally you would give anyway in the hopes of obtaining payment from the subscriber.