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Follow up on what’s the current multiple / when customer presents its contract
February 10, 2020
Follow up on what’s the current multiple from article on January 21, 2020
            I agree with your response. Concentrate on running your company today.  Practice using best principles. Having the current Kirschenbaum contract is a high priority. There are many other priorities.  Jim Jr talks with buyers and sellers about sound business practices when AFS reviews goals of a buyer or seller. 
            Run your business as if you were going to keep it forever or sell it tomorrow. 
James T Wooster, Sr.
Alarm Financial Services 
When customer presents its contract
I’m curious of your thoughts on an agreement from a company called Compliance Depot which more and more larger apartment/building owners across the United States may be using as a way of ensuring their subcontractors maintain insurance and licensing…  sounds like a decent idea until you look at their agreement which says among other things:
  *  Previous agreements are void (meaning your alarm contract you already signed but now no longer valid).
  *  Month to month and cancelable at any time
  *  Indemnification provisions by the alarm company for Compliance Depot and the client for pretty much anything
  *  We have to pay them to verify that we have insurance in place!!!  Really?  Yes, they charge the subcontractor to be verified by them.
  *  They are in control of any defense and settlement
  *  If you sell your company or just the contract to another alarm company, you are still on the hook for any liability.
                         The indemnity is the most distressing.  This agreement is not written for the alarm industry as our relationship lingers long after our technicians walk off the job through monitoring, testing, reporting, etc.
            So….. do I still do the job and hope my insurance company would cover any losses, god forbid, that may happen?  After you read through my highlighted text on the agreement I hope you will distribute to your readership the answers to the above as we certainly wish to do business with the larger clients but at what cost?  Does the alarm industry as a whole need to stand up and say no???? 
Not in my backyard…
Yours for better security,
Steve Sopkin, President
            Whether you do the job or walk away is your call; it’s a business decision, not a legal decision.  Of course no one wants to pass up a profitable opportunity, and that’s your first instinct.  After you have little more time to think it over doubt creeps in, wondering what your potential liability exposure might be.  You’ve identified the provisions that extend your exposure.  Here’s my legal confirmation:  the provisions are enforceable and they most certainly increase your risk.  On the profit side, you may have additional expense for insurance requirements and other requirements, particularly the hoops you need to jump through to get paid, customer’s right to cancel pretty much at any time, and the indemnity provision.  I believe you were thinking that alarm companies, unlike most other trades, need to be concerned about claims which arise not because the alarm system or alarm employees caused a condition resulting in loss, but because the alarm services didn’t detect a condition undoubtedly created by another.
            You should not be agreeing to customer presented agreements.  You refer to is as a “subcontractor” agreement, but you are not working as a subcontractor, you are contracting directly with the owner, the end user, either directly or through its authorized agent.  You should be presenting a Standard Form Agreement which will contain all of the provisions specifying your services, the limitations of your services and protect against unreasonable claims for customer loss, for which the customer should be insured.
            Keep in minds that if you don’t have a proper contract to present to the customer, expect the customer to insist on its contract being signed.  You need a “form” contract to present in the first instance and you need to approach the transaction in the same way some of your customers do; “This is our contract and it’s our terms under which we are willing to work for you [the customer]”.   You can certainly entertain changes to your contract, but it’s your contract that needs to be negotiated, not the customer’s form.  
            These negotiations are happening more and more and it’s a great reason to join the K&K Concierge Program.  Besides all the other benefits you get a $250 credit each month to be used for contract negotiation.  Since the program only costs $145 a month, it’s a great deal. You shouldn’t be hesitant to negotiate your contract and you shouldn’t be hesitant to get proper advice from legal counsel.  Join the Concierge Program today and sleep better tonight.

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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