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HOW YOU SHOULD HANDLE A SUB WHO WANTS TO MOVE
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It’s not uncommon for you to receive a request from your subscriber [commercial account, but residential accounts also move] that it is moving and wants to move the alarm system to its new location. What it really wants is out of the existing contract, and they think by offering a new contract they can accomplish that. How the subscriber frames that request should be carefully evaluated, along with the existing contractual relationship.
Let’s assume that there is a contract in place with time left on the term. The subscriber may recognize its contractual obligation but may approach the request in different ways. The subscriber may believe it has the right legally, morally, ethically, or practically, to move from the premises and have you either terminate the alarm contract without penalty or require you to move the system to the new location. You must disabuse this misguided belief immediately. There is no right to move an alarm system, and unless you changed the terms of the Standard Form Agreement the subscriber will be in breach of contract if it stops making payment during the term or assigns the contract to another without your consent. Obviously if there is no contract or the contract expired or is about to expire, there is no issue since the subscriber has no continuing obligation on the existing system.
There really is no basis for a subscriber to move an alarm system [maybe if it’s DIY] to a new location and continue on with the existing contract. In point of fact, and the only way you should approach this situation, the existing contract is being terminated and superseded by a new contract. You need to impose certain conditions if you are entertaining this move. The consideration for your letting the subscriber out of the existing contract is the subscriber’s agreement to enter into the new contract. But that shouldn’t be enough because enforcement of the new contract may turn out to be more difficult than enforcing the old contract. How? Well here’s a lawsuit we recently lost because of the inexcusable sloppiness of our client.
Subscriber, an existing commercial account with 2 years left on its contract, requests a move. Alarm company implicitly agrees by engaging in multiple email exchanges dealing with the move and finally by entering into a new contract. However, because of the alarm company’s internal issues the new alarm system doesn’t get completed for months and is never operational. The subscriber finally goes to another alarm company for the new installation. The old alarm company now has a new 10 year commercial agreement and sues to recover. The court finds that the alarm company breached by failing to install the new system and finds for the subscriber. So the alarm company lost on the new agreement and also lost on the old agreement.
Here’s how you handle a move if you actually want to consider it, because you don’t have to consider it. You can let the subscriber know that equipment doesn’t get moved, that the subscriber is liable for the contract terms and if it wants to stop making payments then it will owe 80% of the balance of the term and perhaps the equipment value unless you want to remove it. This is the outcome in the Standard Form Agreements. Ask your subscriber if he or she thinks they can swap a convertible for a hard top just because they are moving from San Diego to Seattle. How long do you think the vehicle leasing company would entertain that request? New equipment can be installed in a new location and that should have nothing to do with an existing obligation at an existing location.
But what if you are willing to entertain the request? You will move whatever equipment you can from the old location or just install a new system at the new location. How do you handle the contract terminology? Your subscriber should know that the only reason you are allowing the subscriber to essentially breach the existing alarm contract is because a new contract is being executed. However, executing the new contract isn’t enough. The subscriber should be required to perform under the new contract or face liability for the old contract and the new contract. Instead of you taking the chance that you’ll get stuck on both contracts require that the subscriber assume liability for both contracts. Here is the provision you add to the new contract:
“Subscriber agrees that this contract is in consideration of Alarm Company waiving Subscriber’s performance of the contract between the parties dated ______ for an alarm system at ______ [old location] and Subscriber agrees that should Subscriber default in the performance of this contract that Subscriber will be responsible for performance of both contracts.”