KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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On line review, Jim’s a crook, is it defamatory / Automatic renewal question / More on automatic renewal
May 25, 2021
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On line review, Jim’s a crook, not deemed defamatory
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Negative on line reviews can be aggravating. You spend countless dollars and time developing a reputation as an honest business person who runs a great company that is fair, honest and responsive to its customers. An anonymous on line posting, devoid of any substance or facts, can damage that reputation and cost you business.
The real problem with on line reviews is that they are usually anonymous, always one-sided and sometimes not even claimed against the right company. Interestingly, as a side note, my firm has a negative review by some deadbeat who claims my firm made a debt collection call at night. The review has been sitting on some lawyer review for long time now. It wasn’t my firm that made the call but another local law firm that happens to have my last name in their firm name.
Anyway, getting back to this article, a Facebook post was posted “Jim is a crook. Worst Company to do business with”. I would have guessed that calling someone a crook was actionable. But the court dismissed the case, holding that the post “is an expression of opinion and therefore not actionable. Nothing in the post implies that there exist undisclosed facts that would support the opinion”
Beginning with what I would think is defamatory with “In my opinion” us a good start to avoiding being sued for defamation.
There are services that advertise removal of on line posts. Let me know if you have any success with any of them.
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Automatic renewal question from article on May 8, 2021
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Ken,
Are you saying that if your contracts do not comply completely with your states renewal laws, the entire contract is void? Even if the customer has been paying for the service?
Daniel
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Response
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I don’t think I said that, but it’s a very good question, and you’re risking your business on the answer, which I don’t have.
You don’t comply with the automatic renewal statute and the customer continues to pay you. Then the issue of contract arises. This can happen in a number of ways, but two that come to mind are:
* The customer stops paying and you demand payment through the end of the renewal term
* The customer has a loss and sues you. You raise the defense of the contract provisions. The customer’s position is that there is no contract because it cannot be enforced since you didn’t comply with the renewal notice required by law.
Failure to comply with a renewal notice law can have consequences. Generally the laws typically hold that the contract cannot be enforced. Without more, that penalty of non-enforcement generally refers to your efforts to collect on the balance of the renewal term. However, the same argument can be made that since you didn’t comply with the renewal notice you cannot enforce the contract, and you therefore continued to provide your services without any contract.
Providing any alarm services without a proper alarm contract is stupid, and dangerous, for you.
If your failure to comply with the renewal notice is pervasive enough, affecting many customers, some of whom complain to the Attorney General in your state, you risk a claim of deceptive business practices. I won’t even try to scare you with what can happen then; use your imagination.
Even if the Attorney General doesn’t get you, prepare yourself for the next headache when you go to sell your alarm contracts. If you’re out of compliance with the renewal law notice you can expect a buyer [unless that buyer is as dumb as you] to reject accounts with no notice or make you get new contracts signed for those accounts; just what you need when you’re trying to sell and retire].
You have two choices with the renewal statutes:
* comply with the law
* make sure your renewal term is month to month, which generally is excluded from the renewal notice laws.
Use the Kirschenbaum Contracts ™ and we will let you know if you have a renewal law you need to know about, though we will still recommend a month to month renewal, just in case a new law is enacted in your state.
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More on automatic renewal from article on May 8, 2021
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Ken,
Well, I AM going to tell you that I have been sending out certified letters each month to various customers that their contract is going to renew - - - - for decades. I have been stymied through the years as to why it is so difficult for anyone to do this. I have a billing program with a "reminder" function that reminds me in advance that a customers contract anniversary is coming up. I have a bundle of certified mail certificates that I get from the post office so that mailings can be prepared here in the office. Once a week they're brought to the Post Office and mailed. Along with the contract renewal notice I ask them to update and confirm their contact list. If I don't get a response, I send them follow up notices in their billing until they return the confirmation. What's so hard about that to do? Computers are your friend. Use them.
Also, every time I do a service call that is more than a few years since the last time I have seen them, I bring a new contract for them to sign. Again, what is so hard about that to do?
And what is this defaulting to "month to month" contracts all about? Sure, at the very least it protects the dealers liability wise but if dealers cannot be responsible enough to integrate an end of contract notification process into their business operations, than what makes you think that they wont wind up at selling time with all, / most, / a lot of their customers on month to month contracts? Isn't the point of extended contracts to increase the value of the contract at selling time? What's the point to being in this business if you won't play the game the way it's supposed to be played? And if you don't play the game, you lose. You can't fix stupid.
I know it's your mission to provide an avenue for dealers to protect themselves liability wise and to increase the equity of their business, but to me, the default month to month is like the Nanny state taking care of everyone who is too stupid or lazy to take care of themselves. Looks to me as if you are just lowering the bar.
Oh, and by the way, in your last response to me about associations you portrayed me as being against ALL associations. Nope. ONLY ONE!
Gene
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Response
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Lot of ground to cover. Let’s do the important one first. Equity in your business; the value of alarm contracts and accounts. Original term contracts may have slight higher value than contracts in renewal, but once in renewal it doesn’t matter if the renewal is month to month, year to year, five or more or “like term”. You won’t see [or shouldn’t see] a different multiple for contracts in original term or renewal term. You probably won’t see this, but this is what is going to happen with offers:
* the potential buyer will take into consideration the percentage of account in original term and renewal term and adjust the multiple offer up or down. If you ask, “how did you decide to offer 33, or 35 or 38, you might get a response that includes, “well more than half your accounts are in renewal”.
* if you have not complied with auto renewal notice then you are more likely to hear that those accounts are excluded from the deal unless you get new contracts signed.
Getting new contracts signed before the old one expire is a good idea, especially if you’re surveying the systems, getting upgrades and additional RMR.
Forgive me if I am skeptical of your claim of compliance. New York is particular hard to comply with. You have only a 15 day window to provide the notice, which must be written and delivered personally or by certified mail. You also have to carefully describe the existence of the automatic renewal provision in the contract.
If you are giving the notice I hope you’re keeping those certified receipts, which you should also be recording on an XL sheet that corresponds to the renewal dates on the contracts. It’s easier to go month to month and no reason not to. Probably time to update your contracts too.
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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
www.KirschenbaumEsq.com
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