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QUESTION:
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Hi Ken.
We have an existing customer with a wireless security system we installed four years ago. He has found an internet source for parts for his system at far less cost than what we charge. He asked us to help him over the phone to program the device into his system. We refused, but offered to have a tech come by and program it in for him, with a service call charge. When we told him the cost would be $90 and we would provide no warranty for the equipment, he said that was too much and hung up. Did we handle this correctly?
Kind regards,
Lenny Bianchi
5 Star Security
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Dear Ken Kirschenbaum,
I am with an alarm company, in Michigan. Back on December 16th 2009, we signed up a small auto/muffler shop to convert his monitoring from ADT to us. I notified him, at the time, that he would need to send a notice of cancellation to ADT, 30 days in advance (being a common practice), of his desire to cancel his monitoring. He called me, today, to let me know that ADT is looking for the balance of the years’ monitoring. The original contract was for a 3 year commitment, renewed annually, unless a written notice was provided 30 days prior to cancellation. The alarm was put in 5 years ago, with a renewal date of December 3rd for the 6th year. Since the 30 day notice was received after the December 3rd date (actually after the November 3rd date with the 30 day notice) ADT is demanding the balance of the year through December 3rd 2010. Is this a legal demand?
Your advice would be appreciated.
Sincerely,
Keith B
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ANSWER:
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Am I becoming "dear abby"? If you want to install subscriber owned equipment that is a business decision you have to make. You would use the Sales Contract and write on it that you are installing subscriber selected, purchased and owned equipment for which you have no responsibility. I probably would have told the sub to call Home Depot and see if they'd come and install it, and I would probably lose the sub, like you may have.
From a legal perspective you can install sub owned equipment. I would also get a Service Contract so that resolves the warranty issue.
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Michigan does not have a statute that prohibits or restricts automatic renewal in contracts. Technically ADT can demand the balance of the renewal term. Whether that is a practical approach is another story. Suing for renewal term is not popular with judges in consumer cases and bad cases often make bad law. A judge could find that the auto renewal term was not conspicuous and therefore not enforceable. In your fact scenario a judge could also find that the few day delay in providing notice of cancellation was de minimus and therefore the contract was effective canceled. Another issue is whether ADT is really going to pursue litigation over what's left of the renewal term. My guess is that it won't.