**********************
QUESTION: 3 DAY NOTICE OF CANCELLATION
**********************
Ken,
I have a question concerning the renewal of contracts for existing clients. When pushing through a new up to date Kirschenbaum agreement for existing clients of ours, is it necessary to also use a 3 day cancellation notice? I understand the 3 day cancellation notice is necessary for new clients, however I do not know if the 3 day is necessary for existing customers getting one of your newest contracts; so an update of an older Kirschenbaum contract.
Please advise
Thank You
SC
*********************
RESPONSE
*********************
Whether you have to use the 3 day notice of cancellation is not going to depend on whether a contract is being presented to an existing customer or a new customer. What's important is whether you're presenting that contract to the consumer at the residence, or at some place other than your principal place of business.
The cancellation notice isn't required if it's not a door to door consumer transaction. Sending the contract in the mail and asking the consumer to sign and return it will not require the cancellation notice. There is of course no harm in providing a cancellation notice even in situations where it's not required. In fact some PERS and DIY agreements provide for a 30 day money back policy.
Remember, the 3 day notice reads the same in all states and it appears above the signature line for the subscriber - consumer. The actual cancellation form is different in each state, which is one reason, not the only one, that we have to customize the Residential All in One state by state. We provide you with the proper cancellation form when you get the Residential All in One.
*********************
ELECTRONIC DELIVERY
*********************
Ken,
As security companies move to electronic contracts, please clarify if the 3 day Notice of Cancellation can be delivered, signed and returned electronically. Or is it required to give the customer a physical copy of the Notice of Cancellation.
Thanks,
Michael
***********************
Response
***********************
This is a very complicated and tricky question because laws have not kept up with technology. I am not aware of any statute that deals with the cancellation notice and electronic signatures. Here is what we do know:
- Electronic signatures on contracts are legal, binding and enforceable
- Consumer laws require particular font size, placement and (sometimes) color
- Consumer laws require that a fully executed contract be provided to the consumer at time of signing
- The 3 day notice of cancellation, when required, is required to be provided in duplicate and the 3 days doesn't start to run until the cancellation form is provided
Here is how I think it plays out until there are specific laws that address the issue:
- If the electronic signature is done by the subscriber and no sales person or other company rep is at the house the 3 day notice is not required
- If there is a sales person at the house and the subscriber is signing electronically on a tablet I think the sales person needs to provide a paper copy of the contract and the cancellation form. If this isn't possible, the Company should provide the fully executed contract and cancellation form to the subscriber and the 3 days isn't going to start running until that is received by the subscriber
- If the Company is not going to provide paper copies of the contract and cancellation notice, then the Company should make available electronic copies of the fully executed contract and cancellation notice so that the subscriber can access them at any time. There should be an acknowledgment from the subscriber of receiving the cancellation form "electronically" and there should be a way for the subscriber to cancel the contract on the electronic format within the 3 days.
Note that this procedure is speculation on my part; an educated guess what a Court may find acceptable in this electronic signature age. Anyone have a better idea or opinion?
**********************
T