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challenges to contract and changes to consider
January 17, 2019

challenges to contract and changes to consider
    Not all of your customers are going to sign your form contract. They will insist that you sign their contract, and, because you want the job, you will. Other customers will butcher your contract until it's not recognizable and you might actually be better off without it. So why have a contract? Because, if you don't have a contract to present to your customers, none will sign it. Some signing is better than none signing.
    There are alarm companies who won't negotiate the terms of the contract. For the most part they are mass marketers, some nationwide and some regional. They may have an on-line electronic contract that can't be modified, or they may not want to waste time negotiating the contract; better to move on to the next prospective customer.
    Most alarm companies are a bit more personalized and will sit and talk with the customer, and that will in many cases involve contract discussions. It's not just customers who happen to be lawyers who want to read and negotiate the contract.    There's nothing wrong with giving it the old college try. You can read that two ways.  The customer trying to get changes, or you trying to get the contract signed without changes.
     We know the likely challenges to the alarm contract. I am called upon to help negotiate the contract regularly. When I have less patience I will often simply tell the customer's lawyer, or contract manager, that I know their concerns and I will make as many changes as I can. I then go through the contract in minutes telling them the changes I'll accept and make. This approach saves a lot of time and usually works.  So why don't we change the form contract so that it already has these changes?  Won't that save the time since there will be less challenges? The answer is no, it won't. Ever here of "give an inch and they want a foot"? 
     But there is one change that I am considering. We have already made it for the Tennessee contracts and the Nationwide contracts. It's in the Exculpatory clause.      This provision states that the alarm company has no liability even if it breaches the contract or is negligent. This provision is carefully scrutinized by courts and the courts refuse to enforce the provision if there is the slightest ambiguity. Lawyer routinely mess up this provision in contracts there are plenty of court decisions dealing with this provision. 
    In just about every, and maybe it is every, state courts will not enforce the Exculpatory clause if there is gross negligence or willful misconduct. Many states define gross negligence as tantamount to willful misconduct. But in these states the courts will enforce the Exculpatory clause absent gross negligence or willful misconduct. But Tennessee seems to have moved a bit further. Since the     Exculpatory clause will not be enforced if there is gross negligence or willful misconduct, the clause itself is misleading if it doesn't carve out those exceptions.      Rather than follow other states where the courts will carve out the exception for gross negligence or willful misconduct, Tennessee court holds that the provision itself will not be enforced because it is ambiguous. 
    Since courts will not enforce the Exculpatory clause for gross negligence or willful misconduct it may be time to state that in the alarm contract.
     If you are not using up to date contracts for your alarm business, you are foolish. And, may I remind you that "a fool and his money are soon parted".
    This week we announce our CONCIERGE LAWYER SERVICE FOR THE ALARM INDUSTRY PROGRAM. I hope you decide to join. I promise we will make it worthwhile.  We want you to think of K&K as your attorneys and we hope to meet your every expectation.  Participation is limited so don't delay.  Now you can afford to have K&K on retainer and available when you need us.
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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