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should you allow assignment of your contract and how do you do that
September 4, 2018
should you allow assignment of your contract and how do you do that 
    The Standard Form Agreements [and most other forms that copy mine] provide that the alarm contract is not assignable by the subscriber. Of course the subscriber can request that you consent to an assignment. Some subscribers negotiate a modification of the no-assignment provision by providing that it can be assigned with Alarm Company's consent, which shall not be unreasonably withheld, or freely assignable, but most of the time the contract will read that it's not assignable. 
    When is this issue likely to arise? It is likely to arise when your subscriber is selling it's business or premises to another. Most of the time your subscriber won't realize it [he or she] is under contract with you. That's one reason my office gets so many lawsuits to process. But if the subscriber does consider the contract it will ask the buyer to agree to continue performance of that contract. If the subscriber and its attorney reads the contract carefully they will realize that seller needs the alarm company's consent to the assignment [most of the time].
    Should you consent? In most cases, yes. If the contract is particularly burdensome to you, you may want to use this opportunity to refuse the assignment and offer the subscriber termination instead. Since burdensome contracts are rare, in most instances you will be faced with either permitting the assignment or risking the subscriber simply defaulting on the contract and the new occupant looking for another alarm company. Yes, the new owner could enter into a new contract with you, and you could then look to sue the original subscriber, but unless you've done additional work for the new subscriber you're likely going to lose if you try and go after the old subscriber. [another topic]. So in most cases you should agree to the assignment and you can impose any conditions you wish. For example, you may want to insist that a system be inspected or updated before you permit the assignment, especially if the new occupant presents a different risk.
    What conditions should you impose? Consenting to the assignment is not enough, especially if it's your subscriber asking for the consent, and it usually is. You get a letter from your subscriber that says it is selling to another company and wants your consent to assign the contract. The letter asks for your consent at the bottom by your signature. Why isn't this enough? Because your subscriber has requested consent to an assignment. You think that your consent to the letter accomplishes the assignment, but it doesn't. You can't accomplish an assignment with a document between you and the subscriber. The assignment is between the subscriber and its buyer [the assignee of the contract]. You must condition your consent to the assignment by insisting that the buyer-assignee assume all terms, conditions and performance of the contract. This should be expressed in the assignment and if the document merely calls itself an Assignment it may not have all that you need. The document should be called Assignment and Assumption Agreement, because the assignee should expressly agree to assume the contract.
    What happens with your original subscriber on an assignment? Often overlooked by your subscriber, or misunderstood by its attorney, is the continued liability of the subscriber upon assignment. Unless your consent to the assignment relieves the subscriber-assignor of liability, an assignment does not relieve responsibility unless the Assignment, which you are consenting to, states that. Typically you will be letting the subscriber off the hook on performance once you approve the new subscriber-assignee.
    Should you get a new contract signed rather than consent to an assignment of the old contract? Generally the answer is, yes. Why wouldn't you try and get a new contract, updated with all the new provisions and a brand new full term? Well the old contract may be so advantageous that you don't want to open a can of worms and signing a new contract with a new subscriber will most certainly entail termination of the old contract. You should use the opportunity to get a new contract signed if possible, along with an upgrade of the alarm system.

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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
516 747 6700