Question:

    Ken,

         We submitted one of our sales contracts (your form) to a
customer.  The customer is not happy with several of the clauses on the
back of the contract (surprise).  I informed them it was a standard alarm
contract, and further stated that it was sent in as our standard form when
we obtained insurance (insurance company approved)?  This being said the
customer wanted to speak to our insurance company to see if it was OK to
change.  I told them I hadn't a clue who they could call to do that, and
that any changes would need to be run past our attorney (you).  They also
saw the indemnification clause and wanted to be indemnified themselves.
          We left off with the customer sending the contract to their
attorneys for approval to sign it, I told them that their attorney will
probably tell them not to.
          Should this go further, can you give me some kind of idea of how
much it would cost our customer for you to negotiate a custom contract for
this job?

Thank you,
Jeff


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Answer:

    Jeff didn't send this inquiry to me for circulation, but I get asked
this question often enough to circulate around.  It's not uncommon for a
subscriber to question one or more of the contract provisions, and there is
no need to take the position that the contract is completely non
negotiable.  There are several provisions that can be changed.
    So the first issue is, am I available to assist you, talk to the
subscriber or subscriber's attorney?  I do those assignments and calls.  If
they run more than a quick question I charge for my time, which is
generally half an hour.  That means that if you have a subscriber with lots
of issues with a proposed contract for monitoring for $16 a month, it won't
be economical to get me involved.  If you have a valuable contract then my
involvement may retain the contract language and save the deal.
     Of course any business type provisions are really up to you. You don't
need lawyers to decide if you should change the length of the term of the
contract, agree to be responsible for false alarm fines, agree to pay for
installation of electrical and phone outlets as part of your job, or paint
the house when you're done.
    Another consideration is that you may have a Contract Endorsement to
your errors and omissions policy which prohibits you from making changes to
your contract without the carrier's approval.  [this is rare, but you
should be sure].
    So what will I typically agree to change?  If you don't have E&O
insurance, I would recommend you make no changes.  If you do have the
insurance then I would, if a deal breaker, waive the indemnity provision,
the insurance procurement clause, waiver of counterclaim, legal fees.
Depending on what state you are in I may agree to add that the exculpatory
and limitation of liability clauses will not be enforced if there is gross
negligence, and that you will be responsible for property damage caused by
your employees while on the premises.
    The above items seem to be the ones that come up if the subscriber
raises issues.
    There are lots of articles on my web page that address these issues and
justify, in a rational way, why the provisions are in an alarm contract and
why they are fair.  Once explained to the subscriber or lawyer they are
usually satisfied.