KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and white list ken@kirschenbaumesq.com ****************************** Term of agreement and replacing old with new contract January 26, 2021 *********************** Term of agreement and replacing old with new contract ************************ Ken, We signed a commercial fire alarm All in One with a subscriber in September 2014. About two years ago they started having issues with their phone lines; the dialer would lock up and we would have to go and reset it. We met with their IT person and Verizon and tried changing the dialer to a newer one with the hopes it could better handle newer technology. It helped but not a long term solution. For the past year we have been trying to sign a new agreement for inspecting, testing, monitoring, and change to radio and/or cellular. The subscriber was concerned about signing a new ten year agreement because they did not know if they would still be in business because of Covid and their lease may not get renewed in three years. We agreed to add a sentence that if they closed due to covid the term would only be for three years. Now they want it changed to right to cancel if they close for any reason. The 2014 agreement has about 45 months to go. Any thoughts and suggestions? Jeff ******************** Response ******************** There are really two separate issues here. If you are being asked to provide repair service and inspection you need a contract for those services. The Fire All in One would be used for those RMR services. If your existing contract, which has almost 4 years until expiration, does not include these services then you shouldn’t be providing them. You could get a new contract for just these services, preserving the existing contract for whatever service it covers, presumably monitoring. The old contract would continue to have the 4 years to go and the new contract could expire if the subscriber closes or moves, assuming you agree to that provision. Whether you should agree to a shorter term [the Standard commercial forms have 10 year term], agree to shorten the term or permit early termination for reason or no reason, is up to you; it’s a business decision, not legal issue. It only becomes a legal issue if you need assistance wording the provision or a dispute arises regarding the provision or enforcement of the provision – which shouldn’t happen if it’s clearly written. Long term contracts, or any fixed term contract, have many advantages for both you and your subscriber, but also comes with a commitment to complete the contract term unless outs are negotiated. Advantages to your subscriber include cementing its relationship with you, being able to count on your services and fixing it’ costs for the services. Advantages to you include reliable revenue and operational stability. I am sure there are other advantages you can think of for alarm company and subscriber. If you have made an investment in the subscriber’s system, selling and installing at no or below cost, for example, or agreeing to a repair service plan when the system requires extensive repairs, you need a longer term contract to recoup your investment and make a profit on the job. On the other hand, if no investment has been made, you may not need a long term contract. Let’s say you’ve had a subscriber for a long time and you’re just looking to update your contract with a new updated form agreement. The subscriber may object to a new 10 [for commercial] or 5 [for residential] term contract and you may agree that the subscriber can stay on as month to month or some other short term. ******************** Bankruptcy filing ********************* Ken, One of our subscribers owes us money, the business closed and they filed for bankruptcy, presume it is a dead issue? She did sign the personal guarantee. Jeff ******************** Response ******************** Dead as Chelsea’s nuts as far as the subscriber goes. [does anyone know where that expression came from – I don’t] You can pursue the personal guarantor. K&K does that all the time. It’s sometimes worth the effort and expense. ************************ To order up to dateStandard Form Alarm / Security / Fire and related Agreements, click here: www.alarmcontracts.com ************************* CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** NOTICE: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles *********************** THE ALARM EXCHANGE
This area is reserved for alarm classifieds, alarm company announcements, solicitations, offers, etc. There is no charge to post a listing here.Include your contact information, phone, email and web site. If you would like to submit a post, please send an email to ken@kirschenbaumesq.com. To create a reciprocal link to our website, click here. ************************************************ Getting on our Email List / Email Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. You can read articles and order alarm contracts on our web site www.alarmcontracts.com ************************** Ken Kirschenbaum,Esq Kirschenbaum & Kirschenbaum PC Attorneys at Law 200 Garden City Plaza Garden City, NY 11530 516 747 6700 x 301 ken@kirschenbaumesq.com www.KirschenbaumEsq.com
