KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Needing new contracts / Mutual indemnity  
August 19 2023
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Needing new contracts
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Ken
          Are you able to help me with a new company that we recently started?  I am in need of obtaining alarm monitoring contracts for Residential and Commercial clients.
  Best Regards,
Vincent S
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Response
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          Good luck on your new venture; you’re starting at the right place.  K&K’s contract forms have been used by the alarm industry for nearly 50 years; the forms are continuously updated as technology and law shifts and changes.  More than half the alarm companies in the US use K&K contract forms or variation thereof, and most companies have purchased the contract; the smart companies keep the contracts updated.
          Contracts are essential for your protection against customer [and non-customer] claims, to partner with a reputable central station to monitor your accounts, to find an insurance company willing to provide you with E&O coverage and, one day, to attract the best price for your accounts when you’re negotiating to sell the accounts. 
          K&K Standard Form Agreements are the gold standard in the alarm / security / fire alarm and protection industries.
          I’d say you’ve come to the right place, but I can only offer you the water, I can’t make you drink..
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Mutual indemnity
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Ken
          I just signed up for the Concierge Service.
          I am working with a customer, and they want me to make a change to our existing Fire All in One alarm agreement that we purchased from your company. They are asking that I change section 15, the INDEMNITY / WAIVER OF SUBROGATION RIGHTS / ASSIGNMENTS provisions.    
          Here is what they are asking I change it to:
          “Mutual Indemnification. Each of Company and Client (the “Indemnifying Party”) hereby agree to indemnify the other, its affiliates, directors, officers, and employees (the “Indemnified Party”), and hold the Indemnified Party harmless from and against any and all claims, demands, liabilities, cause or causes of action, and attorney’s costs, fees, and reasonable expenses whatsoever, pertaining to all aspects of the Indemnifying Party’s services, business, contracts and dealings whatsoever, except as occasioned by the act, failure to act, negligence, or breach of this Agreement by the Indemnified Party.”.
          Is this change, okay?
Thank You,
Kristin L
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Response
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          If you have a choice I would not agree to the “mutual indemnity”.  While this one carves out exclusion for the indemnitee’s negligence acts that won’t be determined until the case is tried [if it ever gets tried, and most don’t] and that’s too late to provide defense and manage the indemnity.
          I view “mutual indemnity” as a provision that states “we both go first”.  Well, sorry but that just doesn’t work. 
          The indemnity provision is one of the most challenged clauses in the Standard Form Agreement.  Typically the objection calls for the alarm company to indemnity the customer and other times the indemnity provision requested is so convoluted it’s difficult to figure out what it accomplishes, though one thing is for sure, it’s not in the best interest of the alarm company and it’s certainly should not be replacing the indemnity in the Standard Form Agreement.
          While this is not offered as a fix-all solution, and isn’t the best way to go in all situations, I prefer to strike the Indemnity Provision and have no indemnity rather than try and fashion a “mutual indemnity” that actually is understandable and works.  And, by this I mean how is the indemnity provision going to work when an actual claim is made?  Because many claims against alarm companies commence without the claimant knowing what actually went wrong and who is to blame, the mutual indemnity provision tends to cancel out rather than work.  One last thought; transactional lawyers love mutual indemnity.  Trouble is they have no idea how it will work when the claim comes in, and quite frankly they don’t care because they won’t be handling or even involved in the dispute and litigation.  It’s their mess and someone else can clean it up.
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STANDARD FORM AGREEMENTS: To order up to date Standard Form Alarm /  Security / Fire and related Agreements click here: www.alarmcontracts.com
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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