see below for
Q&A re unilateral changes to contract terms /
Comments RE: Getting Contracts Signed
September 6, 2010
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Question:
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Ken,
I’m not sure if you have addressed this or if I have seen it. Before I was using your contracts, I used the standard contracts that were supplied by my monitoring company. Do I need to be using both contracts? One between me and the customer and one from the monitoring company?
Should there be a contract between me and the monitoring company?
Thanks
Stephen
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Answer:
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There are too many alarm dealers who do not understand that they need their own Monitoring Contract. The monitoring contract provided by the central station is not YOUR monitoring contract, and it's not the one YOU need; it's the one the central station needs.
Your Monitoring Contract will differ significantly from the one the central station provides to you. A quick glance at the central station's contract will convince you that it's certainly not a replacement for your own Monitoring Contract. The two most glaring omissions in a central station's contract are that a central station contract does not provide for the payment of any money by the subscriber, and, if it does, it doesn't provide for an amount, and that contract also doesn't have a term (although it may mention that the subscriber is to be monitored for a minimum time).
Your Monitoring Contract, on the other hand, will specify the amount the subscriber has to pay periodically, and it will have a term of 3, 5 or more years, with some automatic renewal provision if allowed in your state. Your Monitoring Contract will also comply with all contract requirements in the subscriber's jurisdiction. Because a central station contracts with subscribers all over the US, its contract is not likely to include all state specific provisions.
When it comes time for you to sell your business, or subscriber accounts, or just tally up your RMR, it's going to be your Monitoring Contracts that you look at, not the central station's contract.
The central station's contract is, nevertheless, important. It will contain information that your Monitoring Contract does not contain, such as contact information, call priority, codes, and other information necessary for the central station to perform its services. The focus of protection in the central station's monitoring contract [referred to in the trade as the 3 party contract because it's signed by the dealer, subscriber and central station] is, of course, the central station.
Your Monitoring Contract will primarily protect YOU.
Central stations will typically insist that dealers get the central station 3 party contract signed. You should, but be sure to use your own Monitoring Contract.
If you are of the mind that you will only want to get one Monitoring Contract signed then make sure it's your Monitoring Contract, not the central station's contract. If you are using my Standard Form Monitoring Contract the central station should accept that contract in lieu of it's monitoring contract. If it won't, give me a call and I'll hook you up with a central station that will. But even with my Monitoring Contract you will have to use another form, probably the front page of the central station's contract, to get all the information the central station is going to need.
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Question: unilateral changes to contract terms
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Hi Ken.
This raises another question. We ordered your contracts and had them printed. No problem getting a new customer to sign them. The problem is getting existing customers to sign a new agreement. We'll mail out 100 and 15 come back signed. We take them on service calls and try to get them signed and the customer says, "I need to let my husband look over these," and we never hear back from them.
I've noticed that with my personal credit card accounts, every so often the credit card company sends me a new agreement that doesn't require me to sign and return it Apparently the fact that I continue to use the credit card indicates acceptance of the new term(s). Lately I've gotten notices from them by email rather than a hard copy in the mail.
Why can't we do this? Couldn't the original contract contain some provision allowing us to change the wording or terms in the future, and once they've been notified if they continue to make payment on the account and receive the services that indicates consent? Otherwise they could choose to terminate.
Kind regards,
Lenny Bianchi
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Answer:
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You raise an interesting point. You could have a contract provision that provides that the subscriber agrees to such terms as the alarm company may reasonably impose during the term of the contract. I am not comfortable with that provision. You already have the flexibility of deciding how you're going to respond to alarm signals and perform your other duties under the contract. I don't know what terms you think you would like to be able to unilaterally change, but I don't think length of contract, renewal terms, changes in limitation of liability or other protective provisions, should be changed by some notice to the subscriber during the term of the agreement.
The analogy to the credit card and other industies is something to think about, and I will give it some thought.
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Comments RE: Getting Contracts Signed September 3, 2010
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With regards to Lou Arellano's letter......
For years the commercial contractors have understood how to take advantage of every twist and turn within the law. In and out of business, different sub corporations and / or partnerships ect. Some of these tactics are now trickling down to the homeowner lever. Everyone is ready to sue for what they feel is the slightest infraction, real or imagined.
The signed agreement is now more than ever a requirement to survive in this business. It's a far cry from the time when a persons handshake was their bond and things out there are not getting any better.
Respectfully,
John W. Yusza, Jr., President
Monitor Controls, Inc.
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another comment:
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I am fairly new to this industry but have been in sales for many years. I could be missing something, but getting contracts signed seems fairly straightforward to me. If you buy a new car, you don't get to take possession until you sign the contract. If you buy a house, you don't move in until you sign the contract. I have never, ever, ever been paid a sales commission without all of the appropriate paperwork being signed, submitted and verified to be correctly executed. I'm not sure why sectors of the alarm industry are any different.
Suzanne Ainsworth, Account Manager
Service Security Technologies, Inc.
Machesney Park, IL.
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