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electronic contract and valuation / does owner have right to passcode / data breach and viruses August 28, 2017

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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electronic contract and valuation / does owner have right to passcode / data breach and viruses
August 28, 2017
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electronic contract and valuation
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Ken,
    At the beginning of this year, we switched from paper contracts to electronic contracts. We use your alarm contracts. Then, a couple months ago, you sent out an article about needing your electronic contract form if we were going to do electronic contracts. 
    Our question is do electronic contracts de-value our company/customer list if we were to sell our company in the future?
    Thinking ahead for an exit strategy and want to make sure we have all the bases covered. 
    Thank you
Respectfully,
Megan
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Response
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    If you're doing electronic contracts then you need the Disclosure and Consent to Electronic Communication agreement because you need to comply with consumer laws regarding delivery of the contract and other documents.  If you delivery these documents electronically you need to get disclosure and consent from the consumer.  
    It's little early to state definitively if electronic contracts will be valued differently than paper contracts, but my guess is that they won't, especially if executed and retained properly.
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does owner have right to passcode
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Ken
    Long time values customer passes away. Longer time (30 years) live in girlfriend has no ownership of home but is allowed by decedent's trust to remain in home for 18 months. Decedent's daughter and trust executor claims to now have ownership of home and demands total access to alarm system including codes and passwords. Daughter canceled all power and phone lines to home. Long time girlfriend (now tenant) started new services in her name and doesn't want to give daughter alarm access because daughter has been coming over unannounced, letting herself in and taking items out of the home.   We had a new contract signed and is in girlfriend (tenant's) name only now. Question is if daughter now owns the property, does she have the right to all alarm information and passwords?   Also, what would we need to substantiate daughter's ownership?
    Thanks Ken and all,
Sloan
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Response
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    The tenant is your customer.  Owners don't have the right to passcodes just because they are the owners.  I would decline to deal with the owner; she isn't your customer and she isnt the end user of the alarm system.
    You don't need to substantiate the daughter's ownership or any other status.  Stay focused on your role in this scenario.  You are party to a contract with the tenant to provide alarm service.  You're not empowered to decide legal issues of who has possessory rights to property.  Someone doesn't like your decision then let them go to court and get an order; then you can comply with confidence.
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data breach and viruses
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Ken
    First I want to thank you very much for the very informative and enlightening articles you have posted the past several years. With video storage moving to the cloud and mobile access via the internet what exposure do we, as integrators, have should a client site be breached or a virus infect their infrastructure?
    Thanks very much,
John D'Agostino
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Response
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    Great question.  You should be concerned with data breach and viruses that may be introduced through two way communication and remote access.  The Standard Form Agreements address this squarely and state that you are not responsible for data breach, corruption and inability to retrieve the data.  Use the Standard Form Agreements and get the best contractual protection you can get.  Then be sure your general liability with alarm industry errors and omissions coverage covers breach and virus.
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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