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.
- Has it been more than two years since your contract was updated?
- Have you drafted your own contract from looking at other industry contracts?
- Have you added to and tweaked your contract yourself?
- Have you never thoroughly read your contract because it’s all incomprehensible, legal mumbo-jumbo?
If you’ve answered “yes” to any of these questions, there’s a good chance your contract has some errors.
Lucky for you, I have developed a handy checklist to help you determine if your alarm contract is up to par, and have provided below examples of some of the mentioned provisions.
Contract Essentials Checklist
- Contract has exculpatory provisions that are conspicuous (preferably on first page) in bold, readable font.
- Contract has an indemnity provision, requiring the customer to indemnify you for any legal actions brought by third parties; and provides that there are no third-party beneficiaries to the contract.
- Contract complies with state/federal laws:
- Automatic renewals
- Credit disclosures
- Exculpatory language used is enforceable in your state.
- Contract has a subrogation waiver.
- Contract has an assignment provision.
- Contract Complies with the Cooling-Off Rule:
- Notice of right to cancel in contract in at least 10-pt font near customer’s signature.
- Separate handout given to customer with notice of right to cancel.
- Contract addresses new technology:
- Cameras, VoIP, cellular communication, remote access applications, data, hacking.
- Contract has been proofread and spellchecked. No typos. Terms used in the contract are defined, e.g., Customer, Premises, Company, System.