KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and white list ken@kirschenbaumesq.com ************************************ Do some customers deserve a different form agreement / ISC schedule April 5, 2019 ************************************ Notice: ISC West. Private meeting times are booked. Concierge Clients should call our Concierge Program Coordinator Stacy Spector,Esq at 516 747 6700 x 304 to arrange a private meeting and consultation. Open Meet and greet schedule at ISC: Meet me at any of the below booths: Wednesday 11:00 am – COPS booth ; 2:30 pm – Avant guard booth; 3:30 pm – All American Monitoring booth Thursday 11:00 am – Rapid booth; 2:30 pm – J. Krug booth *********************** Do some customers deserve a different form agreement ************************ Ken We have a commercial bank that is our customer on the low voltage network cabling side of things that is asking us to take over Fire Alarm, Burg, and CCTV monitoring of all their 8 branches. They are telling us they have several third party requirements which also limits what agreements they can enter into besides their own options. Are there different contracts available for banks and financial institutions other than this Central Office Monitoring on for situations like this? Their contracting review officer has several issues with the standard monitoring contract we got from you years ago. I was able to work through, address and keep in 12 of their other article issues or line item sentences, but Articles in contention that I was not able to talk through and need your opinion on are: 7 Exculpatory Clause 8 Limitation of Liability 9 Liquidated Damages 16. Insurance - they and their insurance agent are saying there is no way they can get this for us? 17. Indemnity Don't know how this may or may not factor in but we are a full service electrical, mechanical, plumbing and general trade contractor that does many millions a year in revenue and this alarm part is a very small part of our low voltage division revenue with only about 200 accounts, mostly fire. We are trying to grow that section over the next year which is how this opportunity came up and not our main line of business. Thanks for your input. Name withheld ************************ Response ************************ It isn’t unusual for an institutional customer, like a bank, to challenge the alarm contract and insist that you sign it’s “vendor agreement”. Their vendor agreement is a one form fits all. Trouble is it doesn’t, especially for the alarm, fire or security industry. Every court in this country has recognized that alarm companies should be permitted to shift the risk of liability to the customer. In the alarm contract this is done by including the provisions you itemize above. Though you have the right to include these contractual provisions, and have them enforced, you need to actually have a contract and you need to make sure that your contract words these provisions with precision, clearly and thoroughly. Almost any error could render the provision unenforceable, and that’s because the courts loathe enforcing these provisions. It is dangerous to do any security or fire work without the protection of the proper contracts. Not only will you expose yourself to protracted litigation and potential liability, but your customer account will have little or no value, no equity, unless there is a proper contract. If and when you go to sell your accounts you will be sorely disappointed. One of the provisions the customer wants is to be added to your insurance policy as an additional insured, and your customer wants indemnity from you. This is exactly opposite from what the Standard Form Agreement provides. While there may be room for modification, it’s never a good idea to deviate from the Standard Form Agreement terms. Compelling as the argument for using proper contracts is, greed often overrides good judgment and business sense. You want the job. I get it. So be careful, beef up your insurance and hope for the best. But you are correctly concerned with liability. We are discussing monitoring fire alarms, for banks. The potential for property damage is huge. The possibility of personal injury or death present. Risk of being sued by neighboring property owners or third parties also possible. You can’t carry enough insurance to cover these possible losses. That leaves your entire company exposed. Do you think a business doing seven figure annual business should risk it all for one or eight fire alarm monitoring jobs? I don’t. So what can you do? So what can you do? You can try and negotiate with the subscriber. If the subscriber is amenable you can have me do the negotiations. The cost will run $250 to several thousand dollars. For $250 you probably get a “no deal” or “no changes from customer demands”. Over $250, we will get most of what we want in the contract. We don’t have different contracts for different customers [other than residential and commercial]. The “protective provisions” need to be the same. Customers who want to make changes to the contract or have their own contracts, refusing to sign your contract, are just as likely to sue you as someone with your contract, more so. Your monitoring contract is from 2009. You need to update your Standard Form Agreements, today; right now. *********************** CONCIERGE LAWYER SERVICE FOR THE ALARM INDUSTRY PROGRAM You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** NOTICE: You can always read our Articles on our website at ww.kirschenbaumesq.com/page/alarm-articles *********************** THE ALARM EXCHANGE
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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 www.KirschenbaumEsq.com
