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SIGNING ALARM CONTRACT
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Ken
    Simply a curiosity question – I’m assuming you have an alarm at your own home.  Did you sign your own contract for the alarm dealer?   
    Thanks for the great articles daily.
David Febbraio
Structured Home Solutions, LLC
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Response
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    Yes I have a monitored alarm system at my home.  For many years I had alarm service and no contract.  I changed monitoring and had to sign two new contracts, one with a company I don't represent [they have the board at the police station] and the other with a company I do represent.  I did modify the contracts and send them back to the alarm companies signed.  What did I modify?  The term, now cancelable at will, the insurance procurement clause, now omitted, the indemnity clause, now omitted.  
    However, I left in the exculpatory clause, limitation of liability clause and subrogation waiver, because I didn't want the alarm companies sued by my insurance company if I had a loss.
    You might wonder if I would be more or less discriminating when signing an alarm contract.  On the one hand I know the provisions that are not favorable to me, where I give up rights I would otherwise have, but on the other hand I understand and appreciate the reasons for the contract provisions.  Others less informed of the legal consequences of the contract and relationship between alarm company and subscriber may recognize what they consider harsh one sided provisions, yet don't know the reasons [or don't care what the reasons are].  
    Do you think the lawyer who wrote the car rental agreement that you see at the airport can get a car without signing?  Or the lawyer who knows all about the terms and conditions of getting on an airplane?  
    No doubt I could get alarm services without signing a contract but why would I want to put the alarm company who is accommodating me to that added risk?  I carry enough insurance, I hope.  
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COLLECTING BALANCE OF CONTRACT
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Ken
    A friend of mine went to small claims court against a customer who had three years left on a 5 year commercial contract.  The judge said that my friend proved his contract was valid and that he had won the case, however would only grant 6 months of the monitoring owed. My friend argued that the price of the installation was tied to the 5 year term, and if the customer agreed to the term, why would he only get the 6 months owed. He does not use your contracts, I do use your contracts and am wondering what wording is in them to ensure full payment, or what do we need to do in the future to be able to collect on balance of contract, or is it even really possible?
Regards,
Doug Scheer
Scheer Security
Oakley, CA
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RESPONSE
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    Using small claims court to pursue your collection cases is a crap shoot.  In small claims the Judge [or appointed arbitrator] is not required to comply with rules of evidence or even substantive law, but is permitted to make decisions based on "substantial justice", which as you can imagine is a rather vague concept.  Appellate courts have overruled small claims decisions, but there really has to be significant departure from fairness that constitutes abuse of the process.  Also, a small claims decision carries no precedential authority; it means nothing outside of that particular case.  So this same judge on the same night could find for the alarm company and award more than 6 months or all months or no months.  
    Interestingly you note that your buddy argued that the "price of the monthly payment" was tied to the 5 year term.  I wonder if that argument was made before or after the judge let his decision be known; before or after the judge made up his mind on the issue, which could have been before the case even started [some judges harbor preconceived notions about alarm companies specifically, service companies with long term payment commitments and protecting the poor consumer above all other considerations].  The small claims judge knows the decision is not likely to be appealed, and if an arbitrator is selected to hear the case no appeal is permitted.  
    You are using one of our Standard Form Agreements and you have every reason to expect the liquidated damage provision to be enforced.  We have recently updated the All in One form to include "early termination" option which essentially is the same as the liquidated damage provision, calling for 80% of the balance of the RMR payments.  Keep in mind that for you to be entitled to the liquidated damage or early termination fee, if applicable in your jurisdiction, the subscriber needs to be in breach and you need to be free to any breach.  Your breach can justify the subscriber's termination without consequence.  Most subscribers will not come to court and admit that you are free from fault and that they just decided to breach the contract.  They usually have a story to tell which includes complaints about their relationship with you and your contract.  
    To prevail on your collection cases be prepared and make sure your attorney is prepared.  If you are in New York, New Jersey or Florida and using our Standard Form Agreements [the All in One form] you can use my office for your litigation and collection.  Contact me directly or Jesse Kirschenbaum,Esq at 516 747 6700 x 307 or Jesse@Kirschenbaumesq.com.  For our Litigation Package which includes our Commence Litigation Sheet contact Maria Contreras at mcontreras@kirschenbaumesq.com or 516 747 6700 x 320.
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