April 2, 2011

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Question

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Ken,

Is a commercial subscriber still responsible for their monitoring contract if their building is destroyed? (by fire)

Thanks

Scott

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Answer

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Facts and law. The facts are that a long term monitoring contract was signed and the building burned down so that monitoring is no longer possible. The issue of law is whether this impossibility of performance will excuse further performance by the subscriber.

Generally, to determine if the defense of impossibility of performance will terminate obligations under the contract the Judge will have to interpret the contract. If the parties to the contract could have or should have contemplated the future occurrence then they should have made provision in the contract to excuse further performance.

When the contract is for a fire alarm system it seems pretty obvious that the possibility of a fire causing partial or total destruction should have been considered a possibility. In that event the need for fire alarm monitoring would either need to be suspended or terminated. However, if the contract does not speak to the matter, I would take the position that the subscriber's obligation continues.

Might be easier to change a few facts. Burglar alarm installed. Burglary, no fault of the alarm system. Subscriber calls and says, well, I installed the system because I had this or that, and now its been stolen, so I don't need a burglar alarm system. I'd enforce that contract too. Try calling your car leasing company that you lost your license and don't need to car anymore.