KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Personal liability on contract / Cameras that look like smoke detectors
November 8,  2019
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Personal liability on contract
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Ken
            If we have new small (mom & pop) businesses that has no credit can we put the contract in their name and have them sign the contract themselves and have them be personally accountable for the contract?  Can we put the business name anywhere or does that make collections difficult?  Any issues with monthly billing with the name on the Invoice?
 Gary P
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Response
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            Almost all of you have been smart enough to form a legal entity in which to conduct your business.  Whether it’s a corporation [be sure it’s a sub-chapter S corp, not C] or LLC [I still prefer the S corp] you formed the entity so you would not be liable for the entity’s contractual debts.  Same with your subscribers.  They formed corporations or LLCs so they wouldn’t be personally liable for contract debt.
            Of course that doesn’t mean you have to do business with the entity, especially if it’s an empty shell.  If you are making an investment in your subscriber then you want to be reasonably certain that the subscriber will survive to pay its obligations, specifically to you.  The commercial All in One agreements provide for a personal guarantee.  If you can get it, then get it.  No harm in asking, though some subscribers [the dead beats in particular] will look at you like you have two heads, because they aren’t signing.  Doesn’t matter usually because you’ll ultimately find that if the business folds the personal guarantee isn’t going to be worth much, though very often it is.  
            You can also ignore the entity and have the owner sign personally.  Then you don’t need the guarantee, though you may want to get the entity to guarantee the contract.
            The commercial contract is valid and enforceable if not guaranteed, but obviously only against the entity.
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Cameras that look like smoke detectors from article on October 15, 2019
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Ken, 
            In the 28 years that Sperry West has been making smoke detectors looking cameras, I have never heard of one instance where someone replaced a working smoke detector with a camera.  They just add another device.  FYI, we also do make working “real” smoke detectors with a built in camera.  
Barry Levine founder & CEO 
Sperry West
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Response
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            The issue isn’t the existence of a camera, it’s that a smoke detector creates a certain level of expectation that smoke conditions will be detected, saving lives and property because of the early detection.  A fake smoke detector obviously will not fulfill that expectation.  I suppose a superfluous smoke detection could be fake, but not one that would be required to meet code or one that obviously is being relied upon by the subscriber.  
            Barry, you state that Sperry makes a smoke detector that looks like a camera.  That is preferable to making a camera that looks like a smoke detector.  
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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