Question:
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Hello Ken,
I attended your seminar in Las Vegas. I have ordered all the contracts . I am a Smith & Wesson Dealer.
What contract would I use for doing takeovers? Or would I need a specific contract to do so. I would prefer to have a contract specific to doing this. I am concerned about the previous company trying to come after us for changing the customers service for whatever reason.
Also I am aware of a lot of trunk slammer companies that did not install the inital system properly. Specifically "NO LINE SIEZURE" is this a legal angle for them to get out of their existing contract and perhaps a refund of some sort from the installing company? Most alarm company and manufacture installation standards REQUIRE LINE SIEZURE on ALL Systems. How can I use this defect to my advantage?
Thank You
Richard J
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Answer:
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You don't need a "take over" contract. What you do need is to be sure that whatever service you agree to provide be subject to a contract. Typically you'll need to use the service contract and monitoring contract in a take over situation. If you need to install additional equipment then you'll also be using the sales contract.
Alarm companies don't like to lose subscribers, especially to another alarm company. Yet it happens all the time. I suppose that justification serves two purposes, sooths the conscious and also provide legal defense if you're sued.
Let's examine the scenario you present. Subscriber unhappy with existing alarm company calls you in and you point out that an important feature, line seizure, isn't present; you'll include it when you take over the system. First, since I am not technical, I will for the moment accept your statement that line seizure is customary if not required on all systems. If that is correct then the subscriber may be entitled to terminate the existing contract. I am simplifying of course, because the subscriber may have signed a Disclaimer Notice acknowledging that no line seizure was part of the system for whatever reason.
But assuming the existing system is substandard, you offer to remedy the defects and take over monitoring and service [for fire, also inspection]. You new subscriber has to sign your contracts, in this case Service and Monitoring.
What you are concerned about is getting sued. Right or wrong, if the outgoing alarm company sues you it's likely that the cost of defending the lawsuit will be far more than the take over account was worth. If the outgoing alarm company has deep pockets and is prepared to teach you a lesson, it could be costly, win or lose. [note - some jurisdictions may provide for recovery of legal fees]. You can't stop a lawsuit for tortious interference of contract, but you can at least have a defense. Here's how you build that defense.
First and foremost is a representation by the subscriber that the subscriber called you in and requested your service. [ if you are canvasing a neighborhood knocking on doors suggesting that the subscriber's system is defective and you'll take it over and fix it then you are looking for trouble and likely to find it]. You can't be guilty of tortious interference if the subscriber called you in and asked that you take over the system, absent certain other facts such as your fraud while surveying the system.
Lot's of alarm companies think that getting an indemnity from the subscriber is going to help them. Not likely. The indemnity won't keep the outgoing alarm company from suing, and you turning to the subscriber for indemnity isn't going to help your relationship with the subscriber one bit. You're going to get tossed out as soon as that lawsuit starts and the subscriber is going to run back to the outgoing alarm company, if it will take the subscriber back as a resolution.
What you should do is prepare a carefully documented report of your inspection of the system showing the defects and non conforming nature of the system justifying the subscriber's cancellation of the existing contract. While this also won't prevent a lawsuit at least you are in a better position to win it.
Lawful competition is an interesting topic. Last year I was sending out these emails with one mass email marketing company. I received a solicitation from another company that said if I was with the first company it would give me service for one year free. I tried them out for the year, which is why you get emails from two different companies. Now I am a customer of both since they each offer different features. But I am still perplexed how the first company permitted that solicitation [its non attentive, one of my complaints, so that may explain it]. Anyway, I don't know what would happen if you advertised - if you are an alarm customer of XYZ we will offer you the same or better service for free for one year, etc. I'd like to see that in New York - be great for my collection department.