Question:
Hello Ken,
We are using your contracts with some modification for our format and application.
When we initially sign a new customer we have them sign an Alarm Sale and Monitoring Agreement.
My question is, when they later want to add to that existing system should we have them sign an Alarm Sale Agreement for the additional equipment, or should we have them resign a whole new Alarm Sale and Monitoring Agreement.
Also, If we are resigning a whole new agreement, how do we address the existing installed equipment that we will continue to use?
Thanks in advance for your help.
Jim H
*********************************
Answer:
You are using a Sales Contract. That covers the design and installation of the equipment. It also covers warranty work during the warranty period specified in the contract. That is all the Sales Contract covers, which means that it's protective provisions [perhaps the most important part of this contract] extend only to the design, installation and warranty work.
You are also using a Monitoring Agreement. That contract protects you only in connection with the monitoring and any service work you do in connection with the communication equipment or application only. The Monitoring Contract does not protect you for any installation [other than communication equipment] or any service to the system or its components [other than communication equipment, which is probably limited to communication software].
So what happens when your subscriber requests additional equipment? You have to use a new Sales Contract for that equipment. The Monitoring Contract doesn't change unless the terms of monitoring changes, in which event you would use an new Monitoring Contract.
You didn't mention that you were using a Service Contract. You should be.
If you are, then you may need to have a new Service Contract because there may be additional charges to service the expanded system. If you don't intend to change the charges for service, you should, though you don't have to, use the opportunity to get new service contract, with a new term. [You could also try to get a new Monitoring Contract with a new term, even though it's not necessary unless you changed the communication, such as adding radio].
I also want to mention that the above would not apply to a commercial lease situation. There, you would be using a single contract, the Commercial Lease, which covers design, installation, service and monitoring. When you get a request for additional equipment you would use the Supplemental Agreement, which I provide with the Commercial lease form. You could also use the opportunity to enter into a new Lease agreement, which you most definitely would not call a "renewal contract'. Never call your contract a "renewal contract". But that's subject of a separate article.