March 30 2012

 

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Automatic renewal in Florida

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According to an article in Security Sales & Integration on March 13, 2012, Pinnacle Security [of Utah] agreed to provide consumers who are at least 70 years of age a 30 day cancellation right instead of the statutory 3 days. This agreement with the Florida State Attorney General followed that offices investigation of improper sales and business tactics.

This agreement of course applies to Pinnacle only and no other alarm companies are affected. This is no doubt going to created some confusion among alarm companies as they hear of it and think that the 3 day notice in their consumer contracts are no longer the law, or perhaps no longer competitive. In California for example, I believe ADT agreed with the California State Attorney General to limit its consumer contract term to 3 years. Other alarm companies thought that they too were bound by that term limit, which they are not.

Certainly no one condones deceptive business practices and of course it tends to affect the entire industry.

Check automatic renewal laws in your state here https://www.kirschenbaumesq.com/autorenewal.htm

Thanks again to Bart Didden for bringing this to my attention.

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Question re husband and wife

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Dear Mr. Kirschenbaum:

I think this question may be elementary but I would like to know your opinion.

On the Contracts you sale for residential Burglar alarms can the husband

provide his wife's social security number and or sign her name and vice versa ?

I really appreciate your input in this matter

Mark Pecker

Top Security Inc

North Carolina

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Answer

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The better practice would be to have both sign the contract. If one signs for the other then the signature should indicate that. Thus, the Husband signing for the wife would sign " husband on behalf of wife". You could also add "husband represents that he has authority to sign for wife".

Keep in mind that if the contract is challenged by the non signing spouse that spouse may also claim that the other spouse did not have authority to sign. In other words, no agency power existed. Keep in mind that you cannot establish an agency exists simply by the word or acts of the agent. The principal must have done something to lead you to believe that the agent is acting with the Principal's authority. For a good discuss on this topic [case involves a fire alarm company] see this leading case in Michigan https://www.kirschenbaumesq.com/mich8.htm

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comment on Sub S and LLCs

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Ken,

Your answer is correct about the S Corporation being the best entity for most alarm companies. There is a perception that LLC's are somehow better because they are "newer" and that this "newness" makes them more attractive. There is a reason for each type of entity and the proper choice is generally dictated by the specific alarm company, its ownership, and other conditions. A few years ago I posted some pros and cons for each type of entity and you were correct in commenting that the explanation was fairly technical.

My suggestion is that alarm company owners should consult with a competent tax adviser prior to forming either type of entity. This is one of the most significant decisions that owners will make. Although the two types of entities may be similar, there may be significant issues (payroll taxes, entity structure, ownership, reporting, etc…) associated with selecting the wrong type of entity. Talk to someone that understands the Tax Code, and, most importantly, understands your business before making this decision.

Mitch Reitman

S.I.C. Consulting, Inc.

www.sicc.us

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How do you know when to update contracts?

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Ken

How do I know when a contract should be updated? Do you have a list of

newer/recent versions of various contracts or are you suggesting just buy

the same contracts every year? I'd hate to pay for a contract and find that

nothing had been changed.

Greg

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Answer

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Standard Form Contract updates are announced in this forum. Especially because changes in technology and changes in the law are moving much faster than in the past, contract updates are appropriate and sometimes necessary. The best policy is to print only a year's supply of contracts. Before re ordering your contracts you should check with our Contract Administrator, Eileen Wagda, 516 747 6700 ext 312, to see if your form has been updated.