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contract not with end user / central station has no contract with dealer March 8, 2018

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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contract not with end user / central station has no contract with dealer
March 8, 2018
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contract not with end user
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Ken,
    Thank you for your daily emails.
    I have a question regarding the Standard Residential All-in-One and security Schedule of Equipment and Services.  We primarily use DocuSign for emailing agreements and have only one signer.      On occasion, we get subscribers that wish to have someone else pay for their monthly monitoring fee and/or the one-time equipment and installation fee; ie their mother with a different last name.  The authorization for the DocuSign is set up for the subscriber to sign on the credit authorization.  Our in-house folks don’t care about who is paying and neither does the company we sell accounts to from time to time. 
    I would like to know from the best legal advice in the industry, do you see an issue with the subscriber signer differing from the actual end user.    
    Also, please keep us
anonymous
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Response
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    You want whoever is paying you to be obligated pursuant to a written contract.  So the payor needs to sign the contract.
    However, it's the end user, or it's carrier in subrogation, who is likely to be the one to sue you.  The end user needs to sign the same contract signed by the payor, or a separate contract.  You need the protective provisions in the contract signed by the end user.  You can have them sign the same contract or different contracts.  As for how your electronic forms are signed and managed, I can't comment because I don't know.  However you shouldn't assume that any company providing electronic contract execution and storage knows what you need to be concerned with when you're in the alarm industry.  In fact, you should assume that it doesn't know.
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central station has no contract with dealer
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Ken
    We happen to be on the central station end of this situation; we are the central station.  I would like to get your opinion on our rights to not only advise the subscriber that the monitoring has been cancelled because the dealer has not paid their bill, but actively pursue their business.
    We have no contract with the dealer or the subscriber.  I have no idea how this happened and am fully prepared for the scolding.
    I appreciate your professional input.
name withheld [out of pity]
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Response
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    Let me start by asking this question; perhaps we need a survey.  Who is dumber, the dealer who has no contract with the central station or the central station for monitoring the dealer's accounts?  Though the facts are not that clear, we can probably also ask this question:  Who is dumber, the dealer who has no contract with its subscriber or the central station who monitors that account?  If the dealer is charging $20 bucks a month and paying the central station $4 a month, is the central station 4 times dumber than the dealer? After all, the dealer is risking his business for $16 a month and the central station is risking its business for $4 a month.  
    If there are no contracts then all I can offer is my opinion, which may or may not be considered an educated, expert, ignorant or biased opinion.  I think there is am implicit understanding that the subscriber belongs to the dealer and that doesn't change if the dealer doesn't pay for the monitoring.  The central station should notify the subscriber that monitoring is going to terminate and give a date and time for that to be effective.  The central station should neither solicit or accept direct monitoring from the subscriber.  Unless it has contractual rights to the contrary, a central station should not utilize confidential and proprietary information owned by the dealer for it's own gain.  But read on ....
    That changes if there is a contract.  In fact, in the Dealer Agreement I offer to central stations, the central station does have the option, by agreed contract, to notify the subscriber of the dealers default and the impending termination of the monitoring services, while at the same time offering to monitor the subscriber directly and for much less money than the dealer was charging.  The central station could also recommend another dealer.  Why this remedy?  Because it can be more effective than chasing after the dealer who has defaulted and if the dealer has defaulted my sympathies lie with the central station, not the dealer.  
    My answer for the questions above; I think they are both are off the chart stupid.  Get proper contracts and use them, not some of the time, all the time.
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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
516 747 6700
www.KirschenbaumEsq.com