Documenting Changes to An Existing Customer’s Alarm System or Services

Ask the Attorney:  If I am making changes to an existing Customer’s alarm system, should I have the customer sign a new contract or what else can I do to document the new equipment?

You can use either a new contract or an addendum. A new contract is especially appealing if you’ve updated your contract and would like the customer to sign the latest version; or if you’d like to lock in the customer to a new contract term.

You could, however, also do an addendum to the customer’s contract.  You will want to reference the Customer’s current contract, note the changes being made, alert the customer that the terms and conditions in the current contract still apply, and have the addendum signed by the customer.  This addendum language could be part of a work order/invoice, or a separate documents. And, as always, ensure you keep a copy of the signed document for future reference.

 

 

Do I Need to Give Existing Customers Notice of the Right to Cancel?

Ask the Attorney:  Do I need to give the customer a right to cancel notice if he or she is an existing customer and I am merely servicing the system?

Whether you need to give notice of the right to cancel will depend on whether you are simply doing routine maintenance or service, or more (such as upgrading the system).

First, a refresher on the right to cancel: The Federal Trade Commission’s Cooling-Off Rule gives consumers three days to cancel purchases over $25.

The Cooling-Off Rule applies to sales at the buyer’s home, workplace or dormitory, or at facilities rented by the seller on a temporary or short-term basis, such as hotel or motel rooms, convention centers, fairgrounds and restaurants. The Cooling-Off Rule applies even if the consumer invites the salesperson to make a presentation in their home.

Under the Cooling-Off Rule, the consumer’s right to cancel for a full refund extends until midnight of the third business day after the sale.

Under the Cooling-Off Rule, the salesperson must tell the consumer about the cancellation rights at the time of sale. The salesperson also must give the consumer two copies of a cancellation form (one to keep and one to send if they decide to cancel) and a copy of the contract. You should also have a third copy of the form that the customer signs acknowledging receipt of the form, which you keep.   Further, the customer’s contract should explain the right to cancel directly by the place for the customer’s signature, in at least 10-point, bold font.

Getting back to the question: One of the exceptions to the Cooling-Off Rule is where a consumer’s purchase is made as part of a request for the seller to do repairs or maintenance on personal property.

So, if you are performing regular service or maintenance for a customer, you probably do not need to give the customer notice of the right to cancel, even if the amount owed is over $25. If, however, you are doing more than routine maintenance or service—say, for example, upgrading a system, or installing new equipment—then you will want to give the customer notice of the right to cancel.

Do You Need a Contract When you Are Selling and Installing But Not Monitoring?

Ask the Attorney:  I have some customers that just want equipment sold and installed for them but not monitoring service, what, if anything, should I do to protect my business?

Just as your monitored customers could experience as loss, so could a customer to whom you sold and installed alarm equipment. So, even if you are not facilitating third-party monitoring, you will still want a contract to protect your business.  This contract won’t be the same as a typical monitoring agreement, but will still have some of the same essential elements:

  1. A detailed description (type, manufacturer, model) of the equipment sold and installed.
  2. An Indemnity agreement.
  3. Limitations of liability and damages.
  4. A subrogation waiver.
  5. A notice of the right to cancel.
  6. The customer’s signature.

 

 

6 Small Contract Mistakes That Can Sink Your Business

Sometimes it’s the little details that can make or break your contract.  Attorneys pay a lot of attention to the larger—seemingly more important—contract terms, such as limitation of liability and damages, subrogation waiver and indemnity.  But oftentimes it is something small, but no less important, that can spell doom (or at least a major headache). Continue reading

Alarm Contracts For Purchase Online

You’ve been asking (and asking…) and I am finally delivering:  customizable alarm contracts are now available online for immediate download.

Available now:

Installation and Monitoring Agreement

Commercial Installation Agreement

PERS Lease Agreement

Supporting documents also available: Schedule of Equipment & ServicesAddendum/Change to Installation and Monitoring AgreementAlarm Response Contact ListPERS Contact List & Data SheetRight to Cancel Handout

Security Alarm Contract Essentials Checklist

Don’t rest easy just because you have a contract with your customer.  Whether your contract will be enforced by a court, or even applies at all if you are sued, depends entirely on what your contract says.  Many alarm contracts I see, a staggering number actually, are riddled with errors that could make them useless. These contracts either simply don’t have the right provisions, or they say the wrong thing.   This puts the business in jeopardy if a customer ever experiences a loss.  Are you in that same boat? Here are some questions to ask your business. Continue reading

How to protect your alarm business from unfair competition.

KONICA MINOLTA DIGITAL CAMERARivalry among alarm business competitors might be fierce, but it also should be fair and legal.  If your confidential information such as customer lists or pricing data get into the wrong hands, it could spell disaster for your business.  As can a key employee’s departure to a competitor with all the details about your business in hand.  What can you do to protect your business’ confidential information in the first instance? And what are your options if you are subjected to competition that is not fair and legal? Continue reading

Four essential things you need to know about the Cooling-Off Rule for consumer alarm contracts.

file7181281481568Even though it’s been around for many years, there still seems to be confusion over the Federal Trade Commission’s 3-day Cooling-Off Rule, and similar state laws, for home solicitation sales. Reviewing electronic security contracts I am often surprised that some companies do not include the 3-day right to cancel language required by law, simply from oversight or misunderstanding the law.  So, when do you have to comply with the three-day right to cancel? And how do you comply—especially in this age of digital contracts?  Continue reading

Noted alarm industry expert sues ADT and Tyco under the False Claims Act and loses.

If you’re involved in litigation related to the alarm industry, you know–or have heard legend of–Jeffrey Zwirn.  He is a darling of plaintiffs’ attorneys, and seems to be involved in every high profile case involving allegations that a security alarm system failed.   Zwirn has made a living, it seems, by targeting large alarm companies.    But this time did he go too far?

Apparently back in 2010, Zwirn filed a qui tam action against ADT and Tyco.  Qui tam actions are a type of civil lawsuit, allowing a private citizen to bring a claim under the False Claims Act, on the grounds that an individual or a business is defrauding the government.  The private citizen sues to recover funds on the government’s behalf, and a percentage of any recovery goes to the private citizen who brought the claim.

In Zwirn’s lawsuit he claimed that ADT and Tyco made false representations to the government about the alarm systems installed in federal courthouses and judges’ homes concerning their compliance with the law and industry best practices.

The government investigated and declined to intervene in the lawsuit.  The court recently concluded that the allegations are meritless and dismissed the action.   It will be interesting to see if and how this affects Zwirn’s work for the plaintiffs’ bar.

Read the court’s opinion here: US ex rel Zwirn v ADT Sec Services Inc

Standard contract language limiting alarm company’s liability found ambiguous by federal appeals court.

You know that language in your contract–that’s in EVERY alarm contract– that says “Alarm Co. is not liable, but if any liability is imposed it will be limited to $[dollar amount] or a percentage of the annual monitoring charge”?  Well, the United States Court of Appeals for the Sixth Circuit has found that those two provisions (1.  Alarm Co. isn’t liable and 2. if it is liable…) are at odds with each other and make the alarm contract ambiguous.  When a contract is ambiguous, it’s up to a jury to interpret what it means.  Yikes!

The Sixth Circuit is the appellate court for the federal courts in Michigan, Ohio, Kentucky, and Tennessee.    So if your alarm business is in one of those states, you probably need to revise your contract.  Everyone else, beware too.  Even if you don’t do business in one of those states, the Sixth Circuit’s decision is persuasive (but not controlling) authority.

Read the decision here:  Ram Intern Inc v ADT Sec Services Inc