Question:
Ken, how do you think people will react IF they read their monitoring contract carries a 7 year term? What were your thoughts behind raising it to 7 from 5? (By the way, I modified the contract I got from you to read 3 years.) I have much less resistance to a client accepting a 3 year term with very little hesitation. If they go 3, most of the time they go much longer until they move or die. Thanks for the great updates.
Robert Lintz
Sentry Installation, Inc.
Answer:
Dear Robert:
I think the term of the contract is just one of the provisions that a subscriber may question. First of all, many if not most subscribers will not take the time to read the contract and it just might signed with the
term provided for in the printed form. Secondly, a properly prepared sales presentation designed to address the term of the contract may overcome subscriber resistance. Thirdly, you always have the option of giving in to a subscriber's request that the term be changed to 5 years, or 3 years. It will just be one negotiation point that you give on which may save you from giving on a more important one, like the exculpatory clause and limitation of liability provision. By starting with a 3 year term you invite negotiation downward from that point. Since the contract has escalation provisions and right to
increase you are not hurt by a longer term contract. You should however have a practice of getting new contracts well before the term of the existing contract terminates or goes into renewal. And, DO NOT CALL SUBSEQUENT CONTRACTS "RENEWAL" CONTRACTS. These contracts are merely contracts. They may say that they supersede a prior contract, but don't use the word "renewal." My experience is that judge's react adversely to that characterization and are less likely to enforce the
acceleration or liquidated damage provision.