KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Residential Subscriber challenging contract provisions / Party Invite / meetings today at ISC
November 20, 2025
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You're invited: K&K 2025 HOLIDAY PARTY WILL BE ON DECEMBER 4, 2025 6 PM Old Westbury, NY [presently, I'll let you know if the location changes]. RSVP only if coming with Kathleen Lampert at 516 747 6700 x 319 or KLampert@Kirschenbaumesq.com or Diana Henriquez at 516 747 6700 x 328 or email dhenriquez@kirschenbaumesq.com. Space limited so be sure to RSVP if coming asap
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Residential Subscriber challenging contract provisions
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Ken:
One prospective residential subscriber has raised issues in our Residential All in One. Can you suggest how we respond and an appropriate course of action. This is from the customer:
"I have read the Residential Agreement you sent and unfortunately I cannot sign that agreement as written. I have no objection to you disclaiming liability for some future failure of the system to detect or prevent an incident and I also understand the need for you to protect yourself from frivolous lawsuits. That said, this agreement goes well beyond any reasonable standard. Paragraph 20 requires me to pay all costs associated with any lawsuit even if a 3rd party sues you for reasons up to and including your negligence. Paragraph 21 requires that I add you to my homeowners policy as an additional insured. Paragraph 23 limits your liability to $250 while I must accept liability for liquidated damages of 80% of a 5 year contract even if the system never works and even if the cause is your negligence.
Again, I recognize your need to protect your business but this contract goes well beyond that and I can’t accept these terms.
Please let me know if we can find a way to move forward."
name withheld
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Response
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This kind of challenge is not unusual. As a customer you might not even find it unreasonable. However, customers don't understand the basic relationship between alarm company and customer, and don't appreciate the exposure an alarm company has in providing its alarm services. The difference in perception between detect and prevent loss as well as the unlimited and unknown exposure for damages to an unlimited orbit of people, such as invitees, neighbors, tenants, etc., those potentially affected by an intrusion or fire alarm or other security systems, such as cameras and access control, not only justifies but requires the contractual protection.
Once the customer understands the most basic principle, the rest gets easier. Alarm companies will not accept liability for loss arising from failed security or fire alarm equipment or services, even if caused by the alarm company's negligence. The right to contract away liability even for negligence is recognized and enforced in all states in the US. The unknow and potentially unlimited risks justify the rather harsh and hard to accept principle.
Another rationale is that the alarm company's duty, legal duty, is defined in the agreement to provide services. If that agreement is clear enough establishing responsibility and liability, perhaps better understood as boundaries, it should explain this relationship in an understandable way to the customer. That is primarily why the Kirschenbaum Contracts TM are written in clear understandable language, avoiding legalese when possible. It's not just the customer who has to be able to read and understand the agreement terms, but a judge who may be required to interpret and enforce the contract.
Customer above complains about having to pay costs for indemnity. Well, who should be responsible if the customer's guest suffers a burglary, or fire, at the protected premises? What about neighbors who decide to sue because of their loss? This is simply a matter or allocating risk; who will understand the risk. If its the alarm company then the alarm company needs to find suitable insurance that expects to defend and pay such claims. It's a matter of premium, and ultimately it's the customer who has to cover the alarm company's "soft costs" of operation, operations, such as insurance. If the customer wants to limit his exposure to third parties then he should not permit guests on his property, certainly not with expensive jewelry, and should let the neighbors know that they have no right to expect any protection whatsoever from the alarm system the customer has installed. Adding the alarm company as an additional insured, by the way, can generally be done for no cost to the home owner, though the broker may complain.
The limit of liability drives home the principle of no liability at all, because you don't expect to have to even pay the limit.
The 80% damages the customer faces for breach cannot be compared to your limitation of liability. If you breach the agreement by non-performance then you will not be able to enforce the contract to collect on the contract. So you get zero on your breach.
The Concierge Program entitles you to a free half hour each month for contract review and negotiations. Convincing a customer or the customer's attorney that the contract is in fact fair, even to the customer, takes about a half hour. Sure, modifications are made, but not enough modification to put you and your alarm business in jeopardy. You don't have to give up the customer and you don't have to put your company at unreasonable risk.
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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
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