KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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comment on contract update for force majeure
December 1, 2020
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comment on contract update for force majeure from article on November 13, 2020
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Ken
Regarding your article on November 13, 2020 you have updated your Standard Form Agreements and are offering…..”..updated alarm contracts to include a provision that permits suspension of monitoring if the monitoring center believes that signals are caused during civil unrest, riots or that police response is impractical ”.
Hopefully, alarm suppliers will share with their customers their interpretation of “impractical”, and the expectation of basic on-site-response. RMR market value can plummet is areas of slow or no public police response. However, a substitute for public site-response could soon be available to preserve market value… a new generation of on-demand, private, site-response.
Lee Jones
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Response
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Updated contracts are now available [and most changes were made throughout the year]. The proliferation of riots and changing attitude towards police in too many cities prompted the latest change. While I call it a force majeure provision in this article, that's not really what it is. I don't think alarm companies want a force majeure provision and I'll explain why.
Force Majeure deals with impossibility of performance and, generally, cancels and terminates the contract performance. If not tightly written it opens the door for all kinds of excuses to terminate the alarm contract. Most common to come to mind would be "I lost my lease", "I moved", "I don't need the alarm anymore because .....". These are not reasons to terminate the alarm contract.
Alarm contracts don't have a force majeure clause, at least the Standard Form Agreements don't, because the alarm company isn't concerned with its impossibility to perform. That said, the Standard Form Agreement did excuse monitoring when the monitoring facility was nonoperational or communication pathways down.
To Lee's credit, he has been talking about lack of or reduced police response for a long time. His concern is that the alarm industry sells its service as a link to notify first responders that an emergency condition exists and help is needed. The logical extension of that argument is that if first responders are unable or unwilling to respond to the notification then the alarm service is either reduced in value or rendered useless. One answer, and it's a good one, is private guard response.
We know that conditions have existed where central stations didn't bother to report signals even though the monitoring contract didn't expressly permit no response. This has happened in severe weather conditions, natural disasters. There was no practical reason to report the signal; the central station was overwhelmed with signals from the area, but the central station itself was fully operational.
The problem with a force majeure provisions is that the subscriber will want provisions that permit it to cancel, so the provision excusing performance needs to be carefully drafted and placed in the alarm contract. The 2021 updated contracts will have this update.
As far as private guard response, it's already provided for in the All in One Agreements. Companies that want to provide guard response should be using the Guard Response and Patrol Service agreement.
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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
ken@kirschenbaumesq.com
www.KirschenbaumEsq.com
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