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Question
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Hi Ken,
Thank you for all the valuable information. We purchased your PERS contract a few years ago. I apologize if I’m raising an issue that you’ve already addressed. We would like to add a line to our invoices that says that by paying they are accepting our contract terms and conditions as posted on our website. We’re hoping that we can do this so that as we change our terms and conditions, they apply to all clients. We’re in Canada and auto renewal is permitted so we tend not to get new contracts as terms expire.
Our existing contracts do not stipulate anything about changes to terms. Can we do this and have it apply to all existing contracts despite there being nothing on them saying we can?
If not, would the new terms be enforceable if we add a term to contracts being signed that indicates:
"The Alarm Customer understands and agrees that the terms of service may change from time to time and agrees to be bound by current terms as posted on the Company’s website."
Thank you in advance for your feedback.
Regards,
Kevin B
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Answer
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Most states in US also have no automatic renewal restrictions, so it's not unique to Canada. Nevertheless, I recommend that you get new contracts signed rather than rely on a automatic renewal provision. If nothing else getting a new contract signed is an opportunity to communicate with your subscriber, survey the system and offer upgrades. As fast as contract forms and terms change it pales in comparison to the changing technology which offers more RMR opportunity to alarm dealers.
Can you have terms of service on a web site, and at the same time reserve your right to modify that web site any time you want and continue to bind your subscriber? I doubt it. Sure, you can have terms on your web site but I don't believe you can have terms material to your deal that can unilaterally change and then bind the subscriber. Your written contract [or electronic form] will contain the essential and material terms of your deal. The contract will have to contain the elements of the transaction to be binding on both parties. But no contract [at least no contract that I would write or approve] can contain provisions that dictate ever possible matter that may arise. Certainly not in the alarm business. So it's not uncommon for contracts to refer to other documents, manuals, web sites, spec sheets, manufacturers warranties, codes and regulatory standards. All of these additional documents are part of the contract, but none are likely to contradict the terms of the written contract. For example, perhaps a good form for causing confusion is the AIA form contract. Here you have a 4 or 5 page contract in fine print that's hard enough to read and understand. But if you read carefully it's not really the entire contract. You want the entire contract? Well you need to find the General Contract, the Terms and Conditions, codes, regulations, specification and plans, insurance policies, rider after rider. Why not add a web site to the mix? But even these documents should not change the contract price that's in the first 4 or 5 page contract. You can't have the price of $10,000 for the job and then buried in some rider a provision that states that the price is reduced to $5000. Maybe you could, but I think it would lead to more litigation than the deception is worth.
That doesn't mean that reference to a web site is not appropriate. As I mention above, not all terms and conditions need to be expressed in the contract. Operating procedures are not typically in the contract, and they change from time to time. If your contract says you will provide service as soon as practical, then your web site can set the peramaters for the time. Another example may be how often you send out invoices, or the time of month for sending, or the form of sending. But I don't think you can get away with extending the term of the contract, make financial changes or change significantly the services you are providing. Keep in mind that the Judge's don't think your subscribers are very smart, so the Judges aren't going to let you confuse or deceive them.
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