KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and white list ken@kirschenbaumesq.com
******************************
Comments on altered contracts raising issues on sale of accounts / webinar registration
February 25, 2022
********************
Webinars Schedule: See below for details and Registration
*****************
Webinars:
March 1, 2022: All-in-One Operations and Accounting Software for Security Integrators
March 8, 2022. Recruiting, hiring and retaining field talent
********************
Comment on altered contracts raising issues on sale of accounts from article on February 12, 2022
**********************
Ken
You have said it! I have said it! More times than we can count.
No contract (substantially unaltered) for at least one day that you intend to touch or evaluate an existing system means
* No service
* No installation
* No maintenance
* No design services
* NO MONITORING
Not even a battery replacement. And do not accept money or any other form of compensation. I will also add that this applies to friends, family, your church, your club house or friends of friends; Even if you donate a system to a battered spouse or anyone, no contract, none of the above.
Maybe this time it will be understood by the many who read this.
Thanks,
Bart A. Didden, Executive Claims Manager
Security America Reassurance Group, Inc. - SARG
877-872-1266
bdidden@securityamericarrg.com
*********************
Response
*********************
It’s exasperating to get a claim against an alarm company that should be dismissible with little effort and find that there is no alarm contract or the alarm contract is so poorly written or modified as to be useless; sometimes worse than useless and the cause of more problems than would exist without the contract. Bart sees it as a Claims Manager. I see it when defending claims.
Maybe Bart and I should stop whining about this so much. After all, without claims would Security America need a Claim Manager? It certainly wouldn’t need a defense attorney. Though I’m not too concerned; You’ve heard of the town with one lawyer who couldn’t make a living, at least until another lawyer opened an office in the same town …. Luckily most every town has at least two lawyers. And every town has at least one alarm company.
********************
Another comment
********************
Ken,
On February 12, 2022 your old friend Name Withheld wrote to you about a situation that we encounter frequently when we do Buyer’s due diligence for a transaction. It seems that Mr. Withheld is buying another company and has done his due diligence and ran across an account that is on a Kirschenbaum Contract but for which the “customer crossed out almost all the protective provisions in the agreement.”
While I commend him for performing a contract review, I am concerned that he is trying to DIY the transaction and should be using K&K to negotiate the Purchase Agreement, and a firm like ours to do the due diligence. Had he been using our firms, we would have quickly pointed out that if the Subscriber Agreement was so heavily modified that it omitted the protective provisions, it would typically cease to be Qualified RMR (and would not be purchased). That is, of course, if the Asset Purchase Agreement covers this. If your firm would have prepared the Asset Purchase Agreement it would no doubt have covered this situation (and many others). If it is a DIY transaction, maybe not. While K&K Contracts are great, alarm dealers “modify” them at their own risk”.
We run into this type of situation frequently. In every account base there are some Agreements that are “negotiated” to the point that they aren’t acceptable. Some have simple limitations such as a requirement that the customer approve any assignment by the alarm company. These can typically be resolved by the Buyer and Seller meeting with the customer prior to the Close and obtaining the customer’s consent. Another issue that typically comes up is a property manager or governmental entity that requires the alarm company to sign its Agreement. The problem is that this type of Agreement will typically remove all of the protective covenants, and in some cases, will shift liability from the customer (and its insurance carrier) to the alarm company. Many times this is the result of the customer getting the security company to enter into an installation/monitoring agreement instead of two separate agreements.
While the customer could make a case that the alarm company should be held liable for damage caused during the installation (power drill falls on marble floor, ladder falls through a window, etc…), monitoring is a different situation. I have even seen agreements that called for the alarm company to indemnify the customer for any liability during the monitoring stage. In one case the alarm company was indemnifying the owners of a $30 million building for $65 per month. The solution in all of the cases is to bring in a professional; don’t wait until you are ready to sell the Agreements; have Ken and his associates address the contract issues before you sign with the customer. It is one thing not to be able to sell an agreement for 35X – 40X, it is another thing to be served with a $30 million law suit that exceeds your liability limits.
Another type of contract that we frequently see is a monitoring agreement for a law office. I remember encountering one that was so modified it was a lawsuit waiting to happen. The Seller told me that he had insurance and wasn’t too worried about getting sued. I was watching TV in the hotel that night and saw the same lawyer using a sledgehammer to smash up a sign that said “Insurance Company” and screaming how he would “Make Them Pay.” Yes, I would want to have this nutcase as a customer.
Again, congratulations to Mr. Withheld on his acquisition. I am hoping that he reconsiders DIY’ing his due diligence and retains Ken’s firm to prepare the Purchase Agreement. He may also want to consider hiring a firm like ours because there is a lot more to due diligence than reviewing contracts.
Mitch Reitman
817-698-9999 XT 101
Reitman Consulting Group
http://www.reitman.us
**********************
Response
*********************
While K&K offers a DIY Asset Purchase Agreement in short and long form, both agreements have clear warnings on them that the form is a legal document and should be reviewed, if not prepared, by an attorney.
The Kirschenbaum Contracts™ prepared for end users have contractual provisions that have been chosen and drafted carefully and with the sole purpose of protecting the interests of the alarm company. Every modification erodes the contractual protection and reduces the value of the contract. But there is a difference between reducing value and rendering the contract utterly without value; there are in-betweens. Some changes are more problematic than others. Once you’ve invested in the Kirschenbaum Contracts™ I encourage you to join the Concierge Program, which has as one of its primary benefits a free half hour each month for contract review and negotiation. That single Concierge Program benefit is worth the price of admission; there are other benefits and you should check out the program and then join.
*********************
Webinars: Registration - sign up today
**********************
Webinars
********************
Webinar Title: All-in-One Operations and Accounting Software for Security Integrators
When: March 1, 2022 12 PM ET
Topic Details: Software platform created specifically for the security installer industry. FieldHub tackles some of the thorniest operational arenas that other platforms leave behind, including RMR management and inventory tracking, all on a robust, native general ledger platform to keep your revenue and expenses in sync. Learn how FieldHub provides a single system to manage leads and proposals through project and field service management, inventory, recurring/deferred revenue management, and full accounting.
Presenter: Miles Fawcett, CEO FieldHub Inc. miles@fieldhub.com Phone: 202.417.8196
Hosted by: Ken Kirschenbaum,Esq.,
Who should attend: Company owners, CEOs, CFOs, Manager, back office personnel who work with management software
Register Here: https://attendee.gotowebinar.com/register/6859015638805983246
****************************
Webinar Title: Recruiting, hiring and retaining field talent
When: March 8, 2022 12 PM ET
Topic Details: Even before the pandemic, hiring and retaining field talent in the security industry was growing increasingly difficult. This webinar will explore the best ways to find talent, prequalify them and develop enthusiasm to consider joining your team as well as how to quickly determine if a candidate’s psychomotor skills match their resume. Webinar will discuss skill matrixes and why they are valuable tools to incentivize and retain talent, help improve morale and promote consistent, transparent compensation.
Presenter: Peter Goldring, SET, NICET #143428 Fire Alarm Systems, Level IV, ACFE Certified Fraud Examiner. Peter M. Goldring Consulting LLC Phone 516-640-1410 peter@goldringprotection.com www.goldringprotection.com
Hosted by: Ken Kirschenbaum,Esq.,
Who should attend: Company owners, CEOs, CFOs, Manager, Human Resource Personnel
Register Here: https://register.gotowebinar.com/register/7491717510381999116
***********************
To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com
***************************
CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304.
***********************
ALARM ARTICLES: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles updated daily ********************
THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily
*************************
Wondering how much your alarm company is worth?
Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth
******************************
Getting on our Email List / Email Articles archived:
Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com
**************************
Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com
|
