Cancellation Notice Question - January 2, 2014 - New Webinar Announcement

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Question on cancellation notice

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Ken,

    According to Texas law, when is a contract truly binding.....3 business days after they SIGN or 3 business days AFTER signal has been sent.  There seems to be a lot of talk that the contract is only in force after signals are sent.

Could you please elaborate?

Thank you!

Sharon Drury

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Answer

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    More interesting question than you might have imagined.  The 3 day notice of cancellation applies in ALL states.  A residential subscriber, with some exception I won't get into here, has 3 days to cancel from the date you present the subscriber with the Cancellation Form.  Not only is the 3 day notice required on the contract, immediately above the subscriber's signature in font size dictated by statute, but you must give the Cancellation form.  This form is provided when you buy a residential contract at www.alarmcontracts.com.  

    But your question raises another interesting question.  Your contract may contain language - which my Standard Forms most certainly do not - that the contract becomes effective only once a signal is received by the central station.  If you have such a provision then the contract will not begin until and unless that signal is sent and received.  Why would you include such a condition precedent to your contract.  The Standard Form Contracts call for RMR payments to begin on the first of the month following the date of the contract.  Though you may want to or have to change that if there is going to be a delay in installation, that's the starting point in the printed form.  

    Don't confuse your contract with the subscriber with the three party central station contract that typically states that the contract is not effective until a signal is received.  That is needed by the central station to ensure that the system is properly installed and communication is active.  It's an acceptable provision in the three party central station contract.      But remember, that contract is not your contract and not the one you need with the subscriber.  You need your own contract with the subscriber.

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