KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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Force Majeure provision in alarm contract
October 16, 2020
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Force Majeure provision in alarm contract
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            A force majeure clause excuses performance of the contract if certain contingencies exist.  These contingencies usually equate with impossibility of performance.  The Standard Form Agreements do permit the alarm company to suspend service if the central station is unable to monitor or communication pathways are down.  The only right of suspension for the subscriber is when the alarm company has a repair service obligation and fails to perform repairs after notice from the subscriber.  
            Impossibility of performance is not always the standard.  For example, subscriber's death will not terminate the payment obligation.  Loss of lease, selling home, failing to install communication; all do not suspend the subscriber's payment obligation.  This issue is of course timely because of all the peaceful riots that are causing so much disruption to businesses.  Also, covid is causing many businesses to shut down and many have already gone out of business and many more are likely to close too.  It won't be long before the moratorium on foreclosure and eviction are lifted and the courts back in full swing, resulting in more empty premises and offering excuses for non-payment.  
            It's not uncommon for a potential subscriber to request a Force Majeure provision.  Municipalities and very large institutional subscribers may demand what I think is the ultimate Force Majeure clause, though it called something else, "termination of convenience".  With termination for convenience you don't need a calamity or contingency, the subscriber can just cancel.  So cancel at will is similar to Force Majeure, without the disaster. 
            The problem of introducing a Force Majeure clause in the alarm contract is that subscribers will insist on it being mutual, not just in favor of the alarm company.  Also, if the court interprets the Force Majeure clause as an Impossibility of Performance clause then it could open up unintended excuses for contract cancelation or suspension.  
            Here's how a typical clause might read?  Would you want this as part of your alarm deal?

    "If the performance of any part of this contract by the Company is prevented, hindered or delayed by reason of any cause or causes beyond the control of Company, including but not limited to any act of God, pandemic outbreak, flood, failure of utility service, restrictive governmental laws or regulations, riots, war, adverse weather, or other similar causes beyond the control of such party and which cannot be overcome by due diligence, the Company shall be excused from such performance to the extent that it is necessarily prevented, hindered or delayed thereby for the period of the delay."

      Now read it the way the subscriber will want it.

   "If the performance of any part of this contract by the Subscriber is prevented, hindered or delayed by reason of any cause or causes beyond the control of Subscriber, including but not limited to any act of God, pandemic outbreak, flood, failure of utility service, restrictive governmental laws or regulations, riots, war, adverse weather, or other similar causes beyond the control of such party and which cannot be overcome by due diligence, the Subscriber shall be excused from such performance to the extent that it is necessarily prevented, hindered or delayed thereby for the period of the delay."

            The Medical Alert contract does have a right to cancel upon certain events affecting the subscriber, though the contingencies are limited to specific events.
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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