September 7, 2011
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Question
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Ken,
I just recently bought the all in one alarm contract for Georgia. I see that
this contract is 3 pages long plus the supplemental sales sheet and the
cancellation notice. As for the main contract is there anyway we can reformat
it to have all of it on a one page ( meaning all the info that needed to be
filled out on the front and shrink all the legal writing on the back.)?
I used to be a dealer for another company and this is how they had it if you
need me to email you a copy to see what i am talking about.
Would it be legal to change the term of five years to : (blank space) months?
I offer different terms if my client purchases their equipment or i might not
get them with a five year .
Also one last question.
I have never offered a service plan with my alarms. I notice you have a spot
in the contract to fill in the monthly cost for that. First i haven't any clue
on how much people are usually charge for this, can you lead me in the
general direction of the cost. Also what are standard terms of whats included.
Disc parts, labor charge, trip charges, etc. If I do offer a service plan do i
need to spell out the terms and have it as another form they need to sign.
Thank you for your time, anything you have to say will be helpful. By the way
love the newsletters all the time in my email. Very informative!
Mitch
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Answer
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The All in One combines Sales, Monitoring and Service. As written it is at least 3 pages. In some states it's more than 3 pages because of all the consumer law requirements. Even though not all states have minimum font size requirements all of the Standard Form Contracts, the All In One included, are written in at least 8 point font so that the contracts are readable. Contracts that obscure the print or are difficult to read are asking for trouble in the form of a Judge refusing to enforce the contract. Of course in jurisdictions where there are minimum font size requirements a contract written in smaller font will not be enforced.
The All In One cannot be shrunk in size so that it's front and back. Your alternative is to get the Sales, Service and Monitoring contracts in separate forms; they are all front and back only.
You can change the initial term of the contract. The form comes with a printed 5 year term. I suggest you leave it. You can always hand cross out the 5 years and put in a lesser, or longer [not too much longer] term. If you leave the printed 5 year term most subscribers will sign it that way. If you leave it blank you will have to negotiate the term with every subscriber. Longer term contracts are generally considered more valuable.
How much you should be charging for your Service Contract is not a legal issue, so better answered by your fellow alarm dealers. The Standard Service Contract includes labor and material. However, service does not include damage to the equipment by anything other than ordinary wear and tear; lightening and electrical surges are excluded. Service contracts work when you look at all of your accounts. Those with no or few service calls offset others with more service calls. Overall you should generate more service revenue with the recurring revenue rather than per call service. In any event, you need the Service Contract because it will protect you for your service work, whether you elect the recurring revenue or per call relationship.
You can change the Service Contract to provide for only labor, only material, or whatever other terms you like. I would say that the Standard Form is written as the suggested practice, but by contract you can certainly make changes. You might be more comfortable running those changes by me and my staff, especially if they are legal as opposed to business type changes.