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ISSUES WITH CONTRACT MODIFICATIONS / EX PARTNER / GETTING CONTRACTS SIGNED
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Ken,
We are trying to update agreements with customers by sending them through DocuSign. Customer reviews and signs electronically.... All good until you get one that reads the contract.
We are in wonderful Florida where the contracts renew monthly after the initial term.
Most all of my existing customers are way past their initial term so I am a sitting duck for anyone
who wants to switch companies.
My former partner is now out there since his non-compete ended on 12/31/15 taking away customers.
So my idea is to try to lock in the customers at least for a year or two. We have been sending the contracts saying that we are updating our records and streamlining the process with the electronic signature. We are putting a 1-2 year term depending our knowledge of the customer and what they would sign.
People are very reluctant to sign anything longer.
Questions...
Are the items that this customer crossed out in the attached agreement acceptable?
Is the 3 day cancellation clause still applicable since the transaction is not face to face but via internet/email?
If the modified agreement is not acceptable should I just stick with the original contract?
I have included the original contract for reference.
PS-I prefer not to have the mention of my former partner or my name if used online.
Thanks,
anon
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RESPONSE
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The contract you sent for review is an All in One, which you have modified - I will get to that in a moment. You sent this to the subscriber filling out the monitoring portion and per call service. That's important so we can consider what this subscriber crossed out.
Subscriber omitted 3 paragraphs entirely:
- 15. ALTERATION OF PREMISES FOR INSTALLATION:
- 16. SUBSCRIBER'S DUTY TO SUPPLY ELECTRIC AND TELEPHONE SERVICE:
- 17. LIEN LAW:
None of these pertain to your contract, so the cross outs are fine.
- The subscriber also crossed out the insurance paragraph. I'd prefer to keep it in, but it's not critical, so let it go.
- Subscriber crossed out provision that you can collect legal fees and counterclaim not permitted. These too are not critical issues and you can let them go.
- Subscriber also crossed out that you won't be liable for your subcontractor's negligence. I can live with that too, primarily because you most likely aren't liable for your subcontractor's negligence anyway.
- Subscriber crossed out the Credit check paragraph and the security interest provision, both of which I don't care about.
So the cross outs are acceptable.
You state that you're having a few problems. They are of your own making.
First, your partner is stealing your customers. You didn't negotiate a very good non compete agreement. While there should be a time limit on how long your ex partner can't work near your business, or compete with you, the restriction on contacting your customers that were customers while your ex partner owned the business should be forever. That's right, forever. When he separated from the business you no doubt paid him for his interest; he in essence sold you those accounts and he should therefore be prohibited from soliciting or servicing them. You may have actually diminished your rights by agreement if you are now permitting him to go after those accounts. Should have hired me.
Next. I did not send you the Standard Security Agreement [All in One] with a blank line for the Term. You did that. The Standard Forms provide for 5 years residential and 10 years commercial. By having a blank line _____ which you fill out with a term of 1, 2 or whatever term, you call attention to that term. Of course your subscribers are going to notice it and object to anything long term, especially if you haven't offered any incentive for a longer term. For example, you could have offered a 5 year term at $35 a month; 3 year term at $40 and 1 year term at $45. You could throw in a stand alone smoke detector for the 5 year deal.
Your contract from is from 2014. Get the updated form and this time don't change it.
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