December 8, 2010
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Question:
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Ken,
Is there is a maximum number of year term that a residential customer can sign a contact for?
Is there such thing as a 10 year residential term? What is the maximum allowed?
Regards,
Rich Whitlock
General Manager
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Answer:
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Unless there is a statute in your jurisdiction restricting the term of a consumer contract your contract can have any term that makes sense. By that I mean it should not be so unreasonable as to be unconscionable - i.e., crazy.
Here are a few email articles on my web site that deals with the subject:
http://www.kirschenbaumesq.com/earticle19.htm [commercial]
http://www.kirschenbaumesq.com/earticle53.htm
http://www.kirschenbaumesq.com/earticle197.htm
http://www.kirschenbaumesq.com/earticle532.htm
California alarm companies often raise this question because I believe ADT has agreed with the state attorney general to limit its residential term. That does not affect other alarm companies. I am not aware of any law in CA that restricts residential term.
Keep in mind that there are automatic renewal statutes that limit renewal terms or impose notice requirements. Here is a list of those states [if I left any out please let me know]