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can you get around renewal notice with signed letter by subscriber
August 8, 2018
can you get around renewal notice with signed letter by subscriber August 8, 2018
    I have a potential customer that wants our company to take over the fire alarm monitoring and service for their office buildings in NYC. The contract they have now with the alarm company they use was signed in October 2001. That contract was for 5 years with automatic renewals of 5 years. Since that time the alarm company has sent out contract renewal letter asking for the customer to sign the letter to extend the contract for an additional five years. They are not getting a new contract signed, rather they are doing the renewal by letter.
    My question is, is this legal and binding on the customer. Without naming the alarm company the letter reads as follows:
  Dear Subscriber,
    October is the anniversary date of our contract providing alarm services as described in your current contract. It has been our pleasure to supply you with the best service we can possibly give.
    In lieu of preparing replacement contracts, we are using this simple letter of agreement to extend the existing contract. This avoids having to read the small print all over again. If, however, you would like a new contract or to view a copy of your existing contract, just let us know and we will be happy to provide it to you.
    We believe a modest adjustment of 4.9% over the amount you paid last year is reasonable. All of the remaining terms and conditions of the existing contract will remain the same.
    Please sign and return the enclosed copy of this letter, and your contract term shall be extended for another five years.      We look forward to serving your future needs.
    In anticipation of the receipt of your signed copy of this letter, we will continue t provide services pursuant to your current contract. However, in the event you choose not to extend your contract with XYZ Alarm Co and service is disconnected, any payments received from you for future services not rendered will be refunded.
   Very Truly Yours

name withheld
    The procedure used is acceptable. Though the alarm company is characterizing the transaction as an extension of the old contract, it is really entering into a new contract under the same terms as the old contract, except for the price increase.
    Automatic renewal in New York is challenging because a notice of renewal must be sent out by certified mail or hand delivered within a 15 day window period, between 30 and 15 days of the renewal date. Most NY alarm companies don't comply with the statute. The company you are referring to isn't trying to comply with the statute because it is requiring a new signature to a new 5 year agreement, the terms of which are in the old contract. I think it would hold up, especially since the letter and return signed letter is through the mail; no 3 day notice of cancellation is required.
    But, this is a very poor practice, and risky one too. First of all, obviously the "new" contract is not going to be up to date; it's at least 5 years old. Second, the process leaves plenty of room for the subscriber to raise issues later, and later is when there is a serious loss and the subscriber or its carrier is looking to impose liability on the alarm company. Pulling out the letter won't help, they have to look for the old contract. The letter doesn't attach that contract. I don't want to lay out a case to defeat the contract, or try to, but this process is not as tight as getting a new up to date contract signed, and that's what I recommend.
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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
516 747 6700