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.
Wisconsin recently became the thirtieth state to follow the majority rule when it comes to consideration for non-competition agreements. It held that continued employment constitutes lawful consideration for a non-compete agreement signed by an existing at-will employee (i.e., one that does not have a contract). Continue reading
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.
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.
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
You’ve been asking (and asking…) and I am finally delivering: customizable alarm contracts are now available online for immediate download.
Supporting documents also available: Schedule of Equipment & Services; Addendum/Change to Installation and Monitoring Agreement; Alarm Response Contact List; PERS Contact List & Data Sheet; Right to Cancel Handout