how do you handle subs who are moving - early termination options / multiple locations August 15, 2017

KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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how do you handle subs who are moving - early termination options / multiple locations
August 15, 2017

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how do you handle subs who are moving - early termination options

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Ken

Not sure what most companies position is on this: when a customer cancels because they're moving and they still have time left on their contract. Our policy is if they're long time loyal customers we will simply let them out of their contract without penalty. But often we wonder if they are just saying they are moving because when we ask them to pass along our info to the people who bought their house or if we can take over the alarm at their new house we never hear from them again. Is there something we can legally ask them for to prove they are in fact moving and if they don't produce it we will hold them to their contract? As always thanks for your info.

Anon

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Response

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A company policy that permits subscribers to cancel their contract if they are moving is entirely a voluntary provision; in other words, you are not required to offer that "early" termination option. Therefore, you can impose any conditions you wish before permitting the cancellation. Just be sure you are very clear on those conditions to avoid any confusion. Keep in mind, you are always dealing with "the least sophisticated consumer" so "dumb it down".

You should be mindful what you are actually offering the subscriber. If you require that a new contract be entered into at the new location [and this can apply to residential or commercial accounts] you may want to consider whether there will be an installation charge for new equipment that may be required. Not all equipment, and especially material, is transportable. You also need to be careful that the new contract is not less favorable than the one it replaced. Unless worded carefully, it's likely that the new contract will supplant the earlier contract. When the sub defaults on the new contract you won't be able to sue on the first one. So if the first contract is for 5 years, with 48 months left, and the new one is for 1 year, and the default is after 2 months, all you will have is a claim for 10 remaining months unless the new contract provides that upon default the earlier contract will also be enforced. [not a likely provision, especially in a residential contract].

There is no reason to have a policy that permits "early" termination or excuses breach of the contract [or failure to continue performance]. It's not required and the Standard Form Agreements already have a liquidated damage provision which specifies what is owed by the subscriber if there is a breach or "early" termination.

Are there other industries that offer early termination and on what conditions? I can't image buying a piano on time and being able to surrender it with impunity if you get arthritis and can't play; or buying a home gym and canceling because you don't feel like working out; or buying a home movie theater and being able to cancel remaining finance charges because you're moving. Mercedes Benz has an unofficial policy of letting you out of your lease upon death, but you can't get it in writing when you enter into the car lease. Not particularly comforting to a consumer.

I am not a fan of "early" termination options, but you can design them anyway you wish.

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multiple locations

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Ken,

Thank you for all the great information you share on your newsletters. I had a quick question.

I have a client who has multiple locations (100+).

How can I alter/add to the contract so we can get the least number of signatures, so we don’t bother the owner as much? (like create an additional sheet with all locations and get them to sign an updated sheet every time we add a store, etc.)

Also, can I have one of their territory managers or other senior employee sign the contracts instead of the owner?

This employee was asking if they can sign with a company name instead of their name.

Appreciate your time.

Thank you

Asad Waheed

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Response

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With little modification we can turn the All in One into a "master" agreement so you can use it for multiple locations. Depending on the types of systems and conditions are the multiple locations you may still need a Purchaser Order or some other confirmation of the order with the transactional details. If every location is the same deal then you may only need a new address for each additional location. You can get the terminology for the "master" form for $250.00 from our Contract Administrator Eileen Wagda at 516 747 6700 x 312 or EWagda@Kirschenbaumesq.com. You have to have our Standard Form All in One Agreement to use the additional terminology.

The territory managers can sign the contract and bind the company. The person signing has to sign his or her name, but will indicate that it's signed in a representative or agency capacity. The person signs their name and indicates their position with the company; i.e. Territory Manager; Vice President: etc.

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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
ken@kirschenbaumesq.com
516 747 6700
www.KirschenbaumEsq.com