Ask the Attorney: I frequently do work for builders who want me to sign a subcontractor agreement with an indemnity clause. Should I sign it? Continue reading
Ask the Attorney: My customer is questioning why there are limitations of liability and damages in my contract. How can I explain this, and can I change it?
First explain to the customer that the limitation of liability provision doesn’t protect you from all If an alleged failure of the alarm system is caused by the alarm company’s intentional, willful, or grossly negligent conduct, the limitation of liability will not apply.
The reason that you limit your liability is that the amount that an alarm customer pays for service is insufficient for the alarm company to insure the property protected. That is why the alarm company asks its customers to look to their own insurer should they suffer a loss. Insurance companies base their premiums on their assessment of the value of the property and the vulnerability of the premises. By contrast, alarm service fees are unrelated to the value of the property. Thus, an alarm company cannot undertake to provide an identical type of insurance coverage should the alarm fail to prevent a loss. The contract terms are designed to prevent that from happening. With any reputable alarm company, you will find similar contract language.
You can blame your insurer and attorney for the fact that you cannot negotiate the fact that your company’s liability is limited. You can, however, negotiate the amount of the limitation of damages—say from $500 to $1,000 (or even more). But don’t make it as high as your insurance policy limit.
Ask the Attorney: I sold an alarm system to a local business. The business owner wasn’t available to sign the contract, but she told me to have the assistant manager sign the contract instead. Is that OK?
The agreement is enforceable if the person who signed it had apparent authority to sign. If the company told you (or the circumstances reasonably led you to believe) that whoever signed had authority to do so, the customer cannot later claim the contract is unenforceable because the “appropriate” person didn’t sign it. If you can, document the situation—save the emails or write a memo explaining who signed and why and keep it in your customer’s file.
Two high profile legal matters have been in the news involving allegations of alarm companies’ unfair and deceptive practices. What are these cases about? And what can you learn from them to protect your business from such claims? Read on to find out. Continue reading
Ask the Attorney: I am thinking about selling DIY security systems. Is there anything I need to do legally to sell DIY?
Even though your customer is doing the installation with a DIY security system, your business is subject to security alarm provider licensing requirements in many states (approximately 18) so if you plan to sell outside of the state where you are licensed, you might need to get additional licenses.
You will also need a new contract that is tailored towards the DIY product. The contract will have the same basic terms—including limitation of liability and damages—but the wording is slightly different for DIY contracts and you’ll want to include language protecting you from defects in the customer’s self-installation.
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.
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:
- A detailed description (type, manufacturer, model) of the equipment sold and installed.
- An Indemnity agreement.
- Limitations of liability and damages.
- A subrogation waiver.
- A notice of the right to cancel.
- The customer’s signature.
In my job, I have the pleasure, and unfortunately sometimes pain, of reviewing alarm sales and monitoring contracts for litigation, potential acquisitions, and revisions to contracts. Here are seven mistakes I see most often. Continue reading
If you’ve decided to enter the vibrant market of selling Personal Emergency Response Systems (PERS) you may be wondering what advice a lawyer would give you on how to protect your business. Do you need a contract with your customer? If so, what should it say? And are there any other special legal considerations for PERS? Read on to find out.
The North Carolina Carolina Attorney General filed suit yesterday against now-defunct alarm company ISI Alarms NC, Inc. and its owner, seeking civil penalties for automated calls (a/k/a “robocalls”) the company made to consumers.
The AG alleges that more than 1,000 North Carolina consumers contacted his office to complain after receiving robocalls that claimed that the authorities, including the FBI, had received reports of recent break-ins in the area. The automated message prompted consumers to press a certain number to learn more about recent crimes in their area. Consumers were then transferred to a call center operated by ISI Alarms and heard a pitch for the company’s home alarm system and alarm monitoring services. The automated message gave listeners the option to press a different number to stop the calls, which consumers said did not work.
The Complaint alleges that thousands of such calls were placed to North Carolina home and cell telephone numbers on behalf of ISI Alarm during the past two years, and that the company saw its sales quadruple as a result.
Many consumers who reported getting these unwanted calls had listed their phone numbers on the Do Not Call Registry. Under both state and federal laws, it’s illegal to make most commercial telemarketing calls to home and mobile telephone numbers listed on the Do Not Call Registry. North Carolina law also makes sales calls that use recorded messages illegal even if the call recipients haven’t joined the Registry.
The Complaint also alleges that the AG’s office contacted the alarm company about the complaints, but that the calls continued. And, the alarm company refused to disclose the contact information for its lead generators, who actually placed the calls on the company’s behalf.
The AG has asked the court to award $500 for the first violation, $1,000 for the second, and $5,000 for all successive violations of the North Carolina Telephone Solicitations Act; or $5,000 for each violation of the state’s Deceptive Trade Practices Act.
Read the complaint here: ISI-Alarms-Filed-Complaint.