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Need for contract for repair service and additional equipment
December 23, 2020
Need for contract for repair service and additional equipment
            We were discussing contracts, their importance, etc with one of our Sales Consultants, and the following question came up:
            Right now, if we go on a service call, we don’t require any kind of contract be signed, primarily because the customer has signed our initial agreement which covers service calls in the Terms and Conditions.  
            However, if a customer wants to add a sensor, for example, and they go through install, then we require a whole new contract be signed. 
            The question that came up was, why do we treat them differently, and does it ultimately matter whether it goes through Service or Install if the customer signed our initial agreement (or are we just dealing with a semantics issue)? 
            We want to make our process as quick and painless as possible while also ensuring we are sufficiently covered from a legal standpoint. 
            The first and foremost rule for the alarm industry is, do not do any work without a proper contract.  Remember that and the answer to the question is easy.  
            When the All in One was signed the Repair Service option was selected.  The subscriber had the option of selecting a “per call” relationship or a monthly charge [billed monthly, quarterly etc] under a Service Plan.  In either case, the Repair Service option covered all repair service during the term of the agreement and renewal terms.  Without the selection of the Service option you would have to get a Repair Slip for every service call, and you’d be wise to get it before you do the service call.  Since this is often impractical, the best practice is to have an outstanding Service Plan or per call authorization.  
            Repair service includes replacement parts, but it doesn’t include additions.  Arguably it might include upgrades or even replacement of obsolete systems, though I would be more comfortable characterizing this as new installation.  
            A new installation requires a new contract, and it may as well be an updated All in One, updating the commencement date of the 5 or 10 year contract.  I can see that the issue of repair, replacement or new installation could be confusing or cross lines.  I suggest we err on the side of prudence and if not sure then treat it as a new installation.  
            If you don’t get paid, what will you have to support your claim to recover?
            If you get sued for a loss, what agreement will you look to rely on?  
            If you’ve performed repair service or new installation you should have a contract that covers that performance.  Because you are constantly updating systems you need to be updating contracts as well.  This will be important if you need to enforce the contract and important when you go to sell your contracts.  While the first reason may never come to be, the second is inevitable.

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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