why 80% liquidated damages / CAD responses
August 14, 2018
why 80% liquidated damages
    Thank you for all your advise both in person and by your daily emails. We use all of your contracts religiously. I never spent much time thinking about the liquidated damages clause but during a recent collection case handled by your office [successfully I might add] the question did come up. Why did you choose 80% as the agreed damages. Can it be 90%. 
    Please let me and your readers know.
    Let's start with a historical perspective. When I started doing collection work, over 40 years ago, it was for the alarm industry. The contracts had a full acceleration clause, which means that the contract provided that upon the subscriber's default the entire contract balance became due and payable.        The contract also provided that the alarm company could terminate all services. That's where we ran into a problem.           While a judge is bound to enforce contracts as written, that rule is not without many exceptions. When public policy is offended the judge will not enforce the contract. Sometimes "public policy" is not easily identifiable. Violation of a statute is easy to spot, but when a default provision in a contract crosses the line from fair damages to a penalty, there is going to be enforcement issues. Judges are free to refuse to enforce a penalty or damages that are so outlandish as to render the contract unconscionable. An unconscionable contract is one that no reasonable person would expect another to sign, and no reasonable person would sign.
    Does a full acceleration constitute a penalty? Probably not in the context of an alarm contract with a stated term of years. Nevertheless, when a judge decides to rule for one party against another that judge is going to come up with whatever reason justifies the decision. So a judge reluctant to rule against a consumer in an alarm case may decide that the default provision in the alarm contract is unenforceable for one reason or another, and calling it a "penalty" is as good a reason as there can be.
    We started experimenting with liquidated damage provisions, rather than full acceleration clauses. There was no magic number. A liquidated damage clause needs to fairly represent what the parties believe would be the appropriate damages in the event of a breach, and a liquidated damage clause should be used when it would be difficult or impossible to establish damages. The liquidated damages agreed to need to be a fair estimate of the damages when the contract is made, and a fair estimate of the damages when the contract is sought to be enforced.
    I will give credit where credit is due. Around the time this transition from full acceleration to liquidated damages was evolving, my buddy Robert Kleinman, corporate counsel for AFA Protective, had a collection case that made its way to the appellate court. In that case the court approved an 80% liquidated damage provision. I don't recall whether there was much reasoning behind that percentage, because it could easily have been 90% or higher, or much less than 80%. 
    Interestingly enough, though my office does lots of collection work for the alarm industry, and all of the Kirschenbaum TM contracts have the 80% liquidated damage percentage, I personally handle more subscriber negotiations at the sign up stage, rather than the default state. The question of liquidated damages comes up once in a while, and my response is rather consistent. I tell the subscriber or its counsel challenging the 80% liquidated personage that the contract is actually being generous to the subscriber, because if we had to prove the damages it would end up being 90% plus in damages. Why? The measure of damage would be amount charged less cost of providing the service. Of course there will be many times when the cost of performance will exceed 10% or even 20%, but the point of the liquidated damage provision is that when it would be difficult to establish actual damages it is appropriate to agree on liquidated damages. 
    So 80% became the industry standard, because more companies use the Standard Form Contracts than any other contract. We have found that the 80% liquidated damage number is readily accepted by all of the courts. So in this case my suggestion is, go with the flow.

CAD responses
    I use alarmCAD 2018.  I have used alarmCAD for about 3 years. 
They sell a self contained version and a version that works with Autocad. I use the self contained version.
I have no problem opening the CADs I get from Architects.  
    On another note I do fire alarm drawings/ calcs / risers for other companies. Branded with their company logo and info.
Terry Blanchett, President 
Security Alarm Co. Inc.
    We use cad 2014. Not easy to learn however one of the best programs I have used. I don’t like the idea of cloud services which is where cad sales have gone since we purchased a stand alone package. You are correct re the widely spread use of this program. Look for a stand alone version...can’t go wrong. 
    in regard to the CAD program :we create template  placing devices along the side of building plot   then by taking each device and placing  and repeating  into each area and/or room  we found that this is best way to do it ! it is quick and easy !
        As for the legend :create one with all potential devices listed then you just enter appropriate number of devices in quantity are of lengend  : make sure legend has symbol and description listed.hope this helps
no name
    Pass on to Anonymous almost any CAD program will accept the universal dwg and dfx universal CAD export/import files.  AutoCad is probably the  most used software but it’s difficult (the last time I tried it).  I use Vectorworks on an Apple computer.  It’s cross platform and easy to use.  Since we only use a small fraction of CAD’s capabilities  it’s a pity there’s not a CAD program just for our industry.
    PS I also use a program that converts pdf files into dwg & dfx files.  It works about 9 out of 10 times.
Barney O’Donnell
HSI Security Systems, Inc
    I’ve been told that it takes about a year to become proficient in AutoCAD when using it every day for year.      There are CAD programs that say they are compatible with AutoCAD. I’ve tried a bunch of them. The program that I have been using for over 25 years, in all its various versions, is Visio.   While no drawing program is straightforward or intuitive, Visio has never failed to do the job. Without sounding like too much of a commercial, the way I use Visio, I  never have to worry about compatibility or new versions of AutoCAD causing me to upgrade.  Since the drawing you may be getting from the architect or engineer may be protected, you may have a hard time opening or changing it in your own cad-clone program anyway.  
    Here’s how I use Visio: I ask the author of the drawings to send me a copy of the drawings that they will save as a .pdf with “layers visible” if it hasn’t been already. Now when you open the PDF drawing you can open up a side menu and start checking off boxes to make specific aspects of the PDF invisible. 
    For example you can click on the words “parking lot” and all the surrounding curbs, lines, handicap areas, etc. will disappear. Next you can click on the words “plumbing” or “notes” or any other part of the drawing that is just plain in the way.  In the end you wind up with a cleaner drawing showing only the features that you want to include as part of your fire alarm submittal drawings.  Next, draw a box around this remaining cleaned up .pdf drawing, select “crop”, then save it as a .tiff or .jpeg, etc.  
    Open Viso, and insert only the floor plan on your drawing page.   Now all you have to do is drop your fire alarm symbols on to the page connect them with lines for the wires, drop on your symbol key, Word file, logo, map image, and all the rest the information you need. This final drawing may be saved as a .pdf , Visio, or .dwg or any of half dozen other file types.  
    Your drawing has crisp clean lines and is indistinguishable from a .dwg original.  Like AutoCAD, once you get going there are plenty of shortcut keys available to you. The best thing is, you don’t have to spend a year learning AutoCAD then learn how to put fire alarm symbols on an AutoCAD drawing. Don’t get me wrong, I’m not knocking AutoCAD, I’m just saying that it is overkill for what we need to do. 
    Visio is definitely worth looking into.
Greg Kessinger SET, CFPS, IMSA, CDT, ICC
    Regarding fire alarm design software, I suggest trying a product from CONTECHNICAL out of Chicago. Works with latest AutoCAD versions and does on-the-fly NAC calculations.  I am about to try it in my practice to see if it saves time and increases accuracy. 
    Will post here my results and evaluation.  Contact info for the product is August Conte at 847-540-6406 or auconte@contechnical.com
    We are an independent consulting firm, specializing in fire code consulting and system design. We also provide certified training in the fields of fire alarm and security technology.  As an independent consultant, we work only for our clients on a fee for services basis and are not affiliated with any manufacturer or product.
    Please visit our website at www.firealarmdesign. net
Joseph Hayes, CPP, PSP, SET
All County Security Inc.
Ossining NY
joseph@firealarmdesign. net
If it is helpful, here are my comments on “CAD software for fire alarm design work” -
We have been doing commercial fire alarm and security design for over 20 years and over that time have attempted to review and use a few CAD programs.  We started with AutoCAD and have remained using it because it is what all seem to be oriented.  This is not only for receiving files from engineering firms and sending out completed drawings, but for obtaining designers and draftspersons who already have requisite CAD drafting skillsets. They are all taught or have learned AutoDesk products such as AutoCAD. Although the majority of drawings only need to be 2D (two dimensional), the past several years, we have had to carry Revit licenses as well so that we can comply with BIM (Building Information Modeling) 3D (three dimensional) requirements for our drawings.  We have not maintained a 2D version for anyone for several years.
AutoDesk has moved to subscription-based licensing.  If your needs are only 2D, you can use AutoCAD LT and the subscription is just under $400/year. You could pay monthly and if it does not work out you can stop or change to another AutoDesk product.  With subscription-based licensing you do not need a support plan and it is updated regularly.  Currently they issue the 2019 edition.  Keep in mind that the 3D and Revit versions will typically demand a more robust workstation to have enough memory and perform well without lag or lengthy re-draw times. There are other CAD software programs out there, some run on the Apple operating system can seem better and not as resource intensive.  Most will be able to convert from AutoCAD and back for the finished file, but some features can be lost.  However, the learning curve for your staff to use those efficiently has been a hurdle. There is an Apple version of AutoCAD but my experience is it seems to lag the Windows version in some features and does not have OLE (Object Linking & Embedding) capabilities where you can embed items such as an Excel spreadsheet with load calculations.
As you enter design work for your alarm business it is necessary to obtain adequate E&O insurance coverage.  Also, for drawings acceptable with most building permit requirements a licensed designer or PE will be required to be involved with the design and to review and sign the drawings.
Richard J. Keller, Sr.
Integrated Protection Services, Inc.
Cincinnati, Ohio
    Thanks to all the experts who shared their expertise, some of whom are listed on The Alarm Exchange under the category Technical Support for assistance with CAD design, as are a few others.  Give them a call.

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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