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QUESTION:

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    We have sent your contract to a customer of ours and they have responded

as follows:  We don't know exactly what these clauses mean.  Can you

respond....

 

1)        # 6. Limitation of Liability. I have not seen this before. This

provision will require research on my part. How important is this

provision to Global?

 

2)        #7 Indemnity Waiver: Again, this is new language. The way I read

the paragraph, it seems customer is indemnifing Global and holding

Global harmless of ALL claims, suits, etc including those caused by the

negligence or actions of Global. Why would I want to agree to this?

 

3)        #8 Insurance. Similar to #6, why would I do this? This clause,

as I read it, says that customer and customer's insurance company will

have insurance in place to insure Global. This does not make sense to

me.

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ANSWER:

    All of the provisions in the Standard Alarm Contracts - found at www.alarmcontracts.com - are important. 

 The limitation of liability clause permits you to limit your liability for negligence in the performance of your contractual obligations.  This is an essential provision in the alarm contract.  You can modify it only by adding that you will be responsible for damage caused by your employees to the premises while they are on the premises.  Even that concession on your part is risky.  A case comes to mind where the alarm company drilled a hole in an old building in Manhattan, hitting a concealed gas pipe.  The building, mixed residential and commercial, was closed and forced evacuated for 3 days. 

 The exculpatory clause and limitation of liability clause should be changed only with great care, and only by an attorney, preferably me.

    The indemnity clause is important, especially when third parties make a claim against you.  Since you should [must] carry E&O insurance the indemnity clause really benefits your insurance carrier.  This provision is therefore often omitted from the contract to save the deal.

    The insurance procurement clause, requiring your subscriber to obtain insurance and name you as an additional insured is a great provision, but one that is routinely objected to by subscribers and one that is typically omitted from the contract to save the deal.

    Keep in mind that all these provisions belong in your standard form contract.  As you use the contracts you will learn which provisions can be modified and to what extent.