Question:

 

Hi Ken,

I have been reading you article and find them to be very informative. I have one question.

If you have a existing subscriber and they want additional work and you already have them on a signed contract, what's needed? Can you type up another contract for the additional work and fax it to them? Can they sign and fax it back? Is that a legal document, if you need it for a case later on?

Please advise.

Evelyn

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Answer:

 

You don't indicate if your transaction is a sale or lease. I will address both.

I will assume you are using the standard contracts that I provide [ www.alarmcontracts.com].

Let's start with a sales transaction.

You start with a sales contract which covers the installation of the equipment. You may have a monitoring contract, if you are providing monitoring service, and you may have a service contract if you intend to provide any service beyond warranty work.

After the contract is signed [and it doesn't matter if the work started, is in progress or is completed] your subscriber requests additional equipment.

That additional equipment has to be covered by a contract. You can amend the existing contract by separate rider, by making changes to the contract and initialing the changes, or by signing a new contract that covers the additional equipment.

 

If the service contract or monitoring contracts will be affected by the additional equipment [for instance if you are adding radio] then you can sign a new monitoring or service contract, or amend the original.

 

With a lease transaction, you have a single Lease that covers installation, service and monitoring.

Your subscriber requests additional equipment or service. When you purchase the Lease I provide a Supplemental Agreement form. This form is used for changes to the Lease for additional equipment or service, and also in the (unlikely) event your subscriber wants to increase the limitation of liability clause.

 

You are definitely right to be concerned about doing additional work, labor or material, without having that specific work covered by contract. In the event of a loss your contracts won't cover the additional work and service unless you have the amendment, rider, Supplemental Agreement or new contract.

This problem comes up frequently when alarm companies do service work outside of the warranty coverage.

You need a service contract. My standard Service Contract is designed with a check off for Pay Per Call or periodic payments for labor and material.