Should You Care Who's Paying You, SIAC Comments, bout Fining Alarm Companies And SIAC

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QUESTION: SHOULD YOU CARE WHO'S PAYING YOU
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Ken,
   Would the fact that the subscriber is not the one making the actual payments (either for the installation or for the monthly fees) cause any problem with enforcing the contracts? (Such as lack of proper "consideration" if I'm using the term properly.)
   In other words, if an adult child purchases an alarm for their parents (and the parents DID sign the contract - your most recent of course), and the CHILD pays all of the fees (installation and monthly), is there any problem with this arrangement? Should the child also sign the contract for some reason? Do the parents, whos house the system is installed in, have to pay anything in order for the contract to be binding upon them?
Thanks,
ANONYMOUS
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ANSWER
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   Using your scenario, if the parent is the end user and signs the contract [which is how it should be] and you get payments from a child or other third person, the contract with the parent is still valid. You can accept payment from a third person. If you do accept payment from the third person you do run the risk that you may have to refund the money. What I have in mind is the third person going bankrupt and the bankruptcy trustee deeming the payments recoverable for lack of consideration. Too remote for you to be concerned with in a residential setting.
   A more compelling question is should you care who is paying you and the answer is yes. Why. First of all, you might be compelled to give the money back as indicated above, I had a case once [I am a United States Bankruptcy Trustee when I am not wearing my alarm hat] where a individual paid his country club for his kid's bar mitzva from his corporation. The corporation filed bankruptcy and I was the Bankruptcy Trustee. I sued the country club and recovered about $30,000 because the corporation derived no benefit from the payment, did not owe the payment, it was never picked up as income by the individual, and I deemed it a fraudulent transfer. Expecially with commercial accounts, where the aggregate payments can add up, you don't want to give it back.
   But perhaps a better reason for knowing who is paying you, and caring who is paying you, is that the party paying you may very well be the end user, and it's the end user that has to sign the contract and be known to you. This happens all the time. You enter into a contract with Supermarket A. Months later you start getting checks from Supermarket B. It's not just that Supermarket B is paying the bills for Supermarket A, but Supermarket A is gone, out of business, and the premises are now occupied by Supermarket B. No matter that both supermarket corporations may have the same officers and other employees. If a loss occurs and you pull out your contract with Supermarket A and the loss is claimed by Supermarket B [or its carrier] you are going to be sunk when they pull out the checks and show that you've been dealing with an entity different than the one that signed the contract and that you knew or should have known that it was not the entity that signed the contract.
   So what should you be doing? When you get a check from a third party find out if that third party is now the end user. If so, require that party to sign a new contract or stop providing any services and go after the original subscriber. In a residential setting find out the relationship of the person making the payment and make certain that it's your original subscriber on the contract who is the end user.
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CONCERNING RECENT COMMENTS ABOUT FINING ALARM COMPANIES AND SIAC
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Ken
   It is always disappointing to see someone making broad, inaccurate generalizations about the alarm industry’s well documented efforts to work with public safety agencies on alarm management issues. These generalizations have no relationship to the facts and provide little value to the discussion. SIAC’s ability to work with public safety leaders nationwide is already well documented. The number of state-wide alarm management committees created with State Chapters of the IACP continues to grow.
   Eighteen consecutive IACP presidents have supported SIAC Executive Director Stan Martin’s position on the IACPs Private Sector Liaison Committee made up of active chiefs and private industry. In recognition of his accomplishments through SIAC, he was just given a special award for his numerous years of service to the committee. Despite years of efforts to promote verified response, only .16% of the nation’s 18,000 public safety agencies have adopted the practice while nine communities that have tried verified response have dropped the policy. Public safety agencies seeking input on alarm issues continue to reach out to SIAC which participates in national and state-wide law enforcement associations.
   The court’s statement that “you cannot fine an alarm company for false alarms that they did not cause through their non-wrongful conduct” – would be similar to saying you can’t give General Motors a ticket if someone driving one of its cars runs a red light. As Jon Sargent pointed out in a previous post, SIAC is not opposed to fining alarm companies under certain circumstances but believes that fining the alarm permit holder is the most effective way of reducing false alarms. The success of the model ordinance proves that point.
   I am not aware that anyone has tried to challenge an alarm-user fine based on this ruling and there is no evidence that this California decision has any influence on collection efforts in different municipalities. Anyone who reads a newspaper is aware that many cities have issues collecting fines for all types of violations.
David S. Margulies
The Margulies Communications Group
SIAC
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Should You Care Who's Paying You / SIAC Comments About Fining Alarm Companies And SIAC - November 12, 2014