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Comment on new subscriber signing contract / Common contract challenges
December 30,  2019
Comment on subscriber signing contract from article on December 23, 2019
            You might have blown the answer on this one.  The writer says the customer kept the same name.  If the acquirer bought the stock (as opposed to assets) then I would say the contract is still good.  Moreover, it’s been over a year and, since I presume they are still paying, would that be a ratification?  There isn’t enough data to make a definitive answer here, but based on what was given, I think he may be alright as is.
            You are correct that if the subscriber does not change then no new contract is needed.  Same subscriber could be a change in stock ownership of a corporation or members in an LLC, or could be that the named subscriber simply changed its name, but it’s the same entity.  But, you should make the same assumption that I did when responding to the initial inquiry, that the subscriber-entity sold to another entity.  In that case an Assumption Agreement or new Agreement would be required.  
Common contract challenges
            I have had a few clients really push back on the sections of the Standard Fire All in One Agreement.  Specifically the;  
  *  Indemnity
  *  Waiver of Subrogation Rights
  *  Assignments
  *  Insurance
  *  Limitation of Liability
            Can you help with a rebuttal for the requirements of having these being required in the agreement, better than “this is very common practice and this is standard language?” I guess put into layman terms why this language is in here and it does not completely write of our responsibility to perfume our duty as outlined in the Monitoring and other sections.
            The consensus I am getting from the clients that are reading this is “we are trying to write off all responsibility”.
   James A
            Each of the provisions you mention are actually written rather clearly and are obviously understood by your subscribers; they just don’t like the provisions.  Why should they?  These provisions are some of the “protective” provisions in the contract and they all serve to shift risk and liability to the subscriber in the event of a loss.  
            Any reasonable subscriber will agree that they don’t expect you to pay to restore a building that has burned down [we are discussing a fire alarm contract], or the contents of a building that suffers a fire.  They don’t expect you to replace their insurance coverage.  But some do, and those subscribers you can do without unless you are charging them enough to make the risk worth your while.
            The updated Standard Form Agreements have been modified to meet some of the most common challenges, without giving up any real protection.  For example, we exclude gross negligence and willful misconduct from the exculpatory and limitation of liability provisions, and why not, the law won’t enforce the provisions if that level of conduct is reached.  You really should have to work at it to commit gross negligence and willful misconduct, though some experts like to throw those terms around as if they are entirely subjective and equate with mere negligence or breach of contract.  
            The alarm contracts are written to insulate and protect you from liability exposure when the alarm doesn’t work as expected.  Expectation is different for you and for your subscriber, and it’s essential that the contract clearly express what is intended, intended by you and accepted by the subscriber.  You are not an insurance company; you do not guarantee no loss will occur; you do not offer “prevention”; you do offer detection, but because of all the variables that can arise you cannot be responsible for loss unless you cause it.  You can’t “cause it” unless you have you been grossly negligent and intentionally acting with disregard to the consequences.  
            It’s one thing to accept the subscriber’s form agreement or agree to delete all or most of the protective provisions from your agreement when performing installation; quite another when performing the RMR items, inspection, repair and monitoring.  You need to contractual protection.  Keep in mind that the Standard All in One will provide the most equity – contract value – if you are selling your accounts.  Make too many changes and a buyer may not want to risk taking over the contract.

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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