Question - electronic contracts
Ken
Do you recommend an electronic signature service for alarm contacts such as Docusign or some other service?
Thanks!
Debbie Leger
Johns Brothers Security
Norfolk, Va
*********************
Answer
*********************
Electronic contracts have several advantages. One that comes readily to mind is that contracts on line are not constrained in length as paper contracts. We were able to keep paper contracts to front and back until we started using the All in One contracts. These are 3 to 4 pages. Nationwide contracts are longer in order to accommodate every state's peculiar laws. The on line versions essentially disguise the length of the contracts until after they are signed and then, sometimes, printed out.
When putting your contracts on line be certain to maintain the font and positioning of provisions as originally designed in the form. We are careful to comply with each state's requirements and I don't believe there are exceptions because you're using electronic versions.
How you get your electronic contract signed, confirmed or acknowledged is less important than making sure you have maintained the integrity of the document in terms of content and layout.
*************************
Question - late fees
*********************
Ken,
I have a question. One commercial customer that I monitor consistently pays late. I have to repeatedly call them to get paid. Are we able to charge a late fee after 30 days? Thanks.
Ferando Pineda
*******************
Answer
*******************
You cannot charge a late fee unless your contract permits late fees and specifies how the late fee is calculated and when it can be assessed. I do not include a late fee provision in the Standard Form Contracts. Why? Well, first, a late fee provision can certainly be added to your Standard Form Contract. But I don't routinely include it for a few reasons. Disputes over late payment are not generally rectified by late payment penalties. A sub that decides to pay late [and I suppose you should be grateful you're getting paid - and be sure that the sub feels that way] isn't going to be receptive to a late charge. Yes some unsuspecting subscribers will simply pay your invoice which includes the late charge, but many will resent it. Also the late fee, in my opinion, conflicts with your right to terminate the contract for timely non payment, and that termination right is found in the Standard Form Contracts. Including a late payment charge almost can be construed as your consent to be paid late as long as the penalty is paid. Better to train your sub's to pay on time.
***********************
Question - collection agencies
***********************
Ken,
I did not see in the forum a section or topic for a creditable, yet tough as nails, collection collection company that I can use to enforce collecting on canceled contracts. Any recommendations? How do most attorneys charge for this? The contract balance is usually only about $1,000. So my attorney at $250 a hr doesn't really make sense.
Thanks,
Randy
**************************
Answer
*************************
I don't recommend collection agencies. Find a lawyer, especially if you have several collection matters a month and a staff to assist with collections. Then be certain to keep in touch with the lawyer to make sure your cases are getting the attention you expect and the results you hope for.
Why not collection agencies? First, they are not typically staffed by the same caliber you would expect from an attorney. While the owner of the company may have good credentials the people actually doing the collecting may not, and these are the people that will be making the phone calls and sending the letters on your company's behalf. Collection procedures have to be carefully considered because of a slew of consumer protective laws and over zealous consumer affair and attorney general staff looking for companies that abuse the public. Collection efforts are often met with accusations, sometimes close to the truth, that would more than justify no payment by the sub. Aggressive collection actions may be met with complaints to consumer protective agencies and that could trigger an investigation and more; you'd wish you never got started.
This is not to suggest that you do not pursue collection matters. My office handles hundreds a month for the alarm industry, but we are mindful that some matters are best compromised and settled, some forgotten about, that our clients generally prefer that we save the account and that consumer complaints be avoided if possible. You may not get that kind of attention by a collection agency, or an attorney for that matter who is not familiar with the alarm industry.
**************************
Question - negotiating contract terms
**************************
Ken,
What would charge me to review and negotiate the necessary changes to the contract from the General Contractor on a new construction contract?
I explained to the customer our insurance does not provide for contractual liability and I can’t put my entire company on the line for $100 consideration. I told him no other fire alarm company’s insurance will cover contractual liability and no company with any assets or plan to continue in business would knowingly sign an agreement like this and any company who would sign it would not have any assets to back up their liability.
Please let me know if you can help me find a workable solution or if I should recommend them to call ADT.
Sincerely,
Matt
****************************
Answer
****************************
I get calls to negotiate with sub's all the time. I generally ask two questions before accepting the assignment. Is the sub willing to talk about and negotiate the contract terms? Will you do the job anyway if I can't get the sub to budge on the terms? If the answer is no and yes, respectively, there is no point getting me involved. So feel out the sub and its lawyer first; see if they are willing to listen to reason -- the reason for your contract terms in the Standard Form Contracts and the reason you can't sign an AIA contract or something similar that exposes you to liability well beyond proportion based on your anticipated profit.
I can generally know if continued discussion will probably lead to reaching an acceptable deal [from the alarm co perspective] in about 15 minutes [which will cost you $125.00]. Then the time that may be required can - and has - take from half hour to several hours. Your anticipated profit on the job or your relationship with the subscriber will have to justify the additional cost you have in getting the contract properly negotiated. That's a call you have to make.
*************************
follow up on does no contract mean no contract? from Feb 14, 2014
*************************
Ken, et al,
We operate under this same strategy. What I have found over the years is that the quality of our customers is actually much higher than it was when we did 3 year contracts. By quality I mean that our service rates and trouble conditions are way down because the customers actually listen to the training and value the equipment when they're paying up front. Our service is better because we CAN be fired (though we rarely are) and our attrition rate is much lower than it used to be. The average household income of our customers has shot up because we only service those who can afford to buy up front and our issues with deadbeats have all but dissappeared.
As to the value of the contracts, at any given time the majority of our customers would be well beyond 3 years old. I would logically argue that a customer who has been voluntarily loyal for 5 years should be worth more than one who has been been forced into loyalty for the same period of time and can still cancel because they are past the initial contract period.
Sure, we sell fewer accounts than we used to, but the customers we do attract are much higher end and genuinely loyal to our brand.
I value your opinion and use your contract, so I would love to hear your thoughts on this in a little more detail. Wouldnt a book of GREAT loyal customers on monthly contract be more valuable than the same number of crappy troublesome customers originally locked in to a contract and now past the initial term with a higher turnover?
Also, G, if you read this, reach out to me. Especially if youre in a different market than Indiana. There is no greater ally than someone whose been in your shoes from a different perspective.
Armando Perez, G.M.
Hoosier Security
317-644-0570
***********************
Response
***********************
You can attract and service high end subscribers who are willing to pay for better systems and services, and still sign them to a long term RMR contract that you will be able to sell if you want to. No contracts do not equate with better subscribers or more loyal subscribers.
***********************
TO SUBMIT QUESTIONS OR COMMENTS REPLY TO THIS EMAIL OR EMAIL Ken@Kirschenbaumesq.com. Most comments and questions get circulated.
**************************
WEBINARS
**************************
Topic: Analysis of the Residential All in One and the Commercial All in One security contracts. This will be a comprehensive review and comparison of the Residential and Commercial contract forms.
When: February 20, 2014 at 12 noon to 1 PM EST. This webinar will not be recorded
Register here: https://attendee.gotowebinar.com/register/8748425151461332994
Presenter: Ken Kirschenbaum, Esq.
Who should attend: alarm company owners, office managers and license compliance officers
******************************
Topic: Analysis of the Commerical Fire All in One and the Fire Suppression All in One. This will be a comprehensive review and comparison of the Fire Alarm and Fire Suppression contract forms.
When: Thursday, February 27, 2014 at 12 noon to 1 PM EST. This webinar will not be recorded
Register here: https://attendee.gotowebinar.com/register/8188883684086152194
Presenter: Ken Kirschenbaum, Esq.
Who should attend: alarm company owners, office managers and license compliance officers
******************************
*****************************
**************
The Alarm Exchange is reserved for alarm company announcements, solicitations, offers, etc. Those wishing to sell or buy; borrow or lend; dealer program or dealer; central stations; insurance brokers; business brokers, insurance companies. Equipment to sell; looking for employees; subcontractors; mergers;
There is no charge to post a listing here. The listing is subject to review and approval and will be posted for approximately 10 days unless renewed. Include your contact information, phone, email and web site. Posting by category will depend on response to this forum. Send your post to Ken@KirschenbaumEsq.com. To see the most current postings go to https://www.kirschenbaumesq.com/article/the-alarm-exchange
**********************
*************************************************************************************************************************************
Many of you are forwarding these emails to friends or asking that others be added to the list. Please tell your friends and employees to go to the Home Page on my web site and sign up for the emails. Thanks.