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Comment on customer changing alarm company
June 19 2020
Comment on customer changing alarm company from June 15, 2020 article
            I’m not so sure your answer to the “customers want to change alarm company” is totally correct.  
            Yes, in the referenced situation, it probably is.  However, even where a customer initiates the inquiry I don’t think it is always clear cut.  For example, what if a customer calls up a new alarm company looking to switch, even citing “bad service”, but then starts haggling for a lower price than he had with the existing vendor?  In that type of case I would suggest that the new alarm company is interfering (at least implicitly) with the existing contract and possibly liable if it takes over service and causes the customer to breach an existing contract.  
            We always ask in takeover situations if the prospect has an existing contract (and the length of term thereof) to avoid that issue. 
Robert Kleinman,Esq
AFA Protective Systems
            The legal question is, is offering a lower price when you suspect a potential customer is under contract with another alarm company sufficient to sustain a cause of action for tortious interference of contract?
            The answer is No.  But that wasn’t the original question in the June 15 2020 article, and Robert presumes much in framing his new issue.
            There is more than a legal issue.  The practical issue is going to be the first hurtle you have to jump over before considering an action for tortious interference [unless you own your own successful alarm company and happen to be a lawyer who loves litigation – especially when you win – and I won’t wait for your response so I’ll add, and you usually do, win]
            There are several criteria that would need to be established before you could be successful with a tortious interference action.  Offering a lower price is possible one factor, but certainly not the most significant and certainly not in and of itself enough.
            First there needs to be a contract.  Without it there is no damage for the inducement to breach.  If the contract has expired there is not further expectation.  I also doubt you could prevail claiming that in the alarm industry there is an expectation of continued service, continued relationship, even after the contract has expired.  That is probably true, but speculation and conjecture is prohibited to support a cause of action, and I don’t think that testimony from an alarm “expert” regarding longevity of relationship will overcome the speculation hurtle.  
            Second, I think you would have to know about the existing contract, and I think you would have to initiate the solicitation.  I also don’t think you are under any obligation to inquire about an existing contract, and I mentioned that in my response in the June 15 article.  A customer could have any number of reasons for requesting your service.  A customer could be looking to supplement the existing system; the existing system could not be working; the existing provider may not be providing acceptable service, right or wrong; the customer could be looking for a cheaper price.
            Another point I mentioned in the June 15 article is that the one issue you do need to ask about when taking over a customer of another alarm company is, who owns the existing equipment.  You need to know this if you intend to use any part of the existing system, including the wires.  You should not use any equipment, even wiring, if owned by the existing alarm company [especially if it’s AFA].  
            So the subscriber tells you it owns the equipment.  You sign up the subscriber.  Your contract calls for an all new system, or it includes existing components and wiring.  You ignore the yard signs; the decals on the windows and on the control panel.  If the decal says “Property of AFA” [or another alarm co] you may have suspicions.  After you sign the customer to your contract you contact the existing alarm company and inquire if it owns the system [or you can wait until you get notice from the existing alarm company that it owns the system].  It’s the subscriber who has the problem at that point.  Your All in One and your Disclaimer Notice is going to state that “some equipment is customer owned” or something along those lines.  The subscriber will have to pay for additional equipment and labor since you can’t use the existing system or components.  
            The Disclaimer Notice is designed to assist in a take-over situation, among other issues.  
            I may as well address the flip side of the issue.  When have you crossed the line and committed tortious interference?  
  *  when you know the subscriber is under contract with another alarm company
  *  when you have access to confidential information regarding the customer and pricing
  *  when you solicit the customer
  *  when you disparage the existing alarm company
  *  when you start out to undermine the existing contract for your own gain, and succeed
  *  when you take-over an AFA account, no matter how you got it [only kidding, sort of]

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
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