KEN KIRSCHENBAUM, ESQ
ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE
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No contract with new occupant who wants to cancel after 9 months of service – what recourse do you have
November 30, 2022
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No contract with new occupant who wants to cancel after 9 months of service – what recourse do you have
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Ken,
I thought I had seen you address this question before but could not find it in the archive.
We have/had a customer which owned a building that had three monitored AES radios that we owned at the site with a signed agreement. The property sold to a new owner which hired a property management firm. We sent over new agreements (exact same as the original) to the new company. Their representative, needed insurance certs, forms etc. which we provided. We continued service while waiting on the signed agreements. In the meantime we have no record of them requesting any changes to the agreement language or terms. This has been going in for 9 months. They have been paying the invoices sent over to them without question.
Now they want to cancel the service and have contracted with another company. Is the balance of the new contract collectable and can we hold them to the contract? By paying the invoices, did they agree to the terms?
anon
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Response
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Another law school question.
First let me remind you where and how you find prior articles, thousands of them: K&K Website at
https://www.kirschenbaumesq.com/page/alarm-articles
There is a search feature on the home articles page so you can put in topics; it works pretty well.
The legal issues will hinge somewhat on additional facts that you didn’t provide, such as the contract with the original customer [which you should have], the contract between the original customer and the new occupant [which you don’t have], correspondence between you and the new occupant, the extent to which the new occupant “took over” the alarm, ie providing new contacts or instructions, what other services, such as I inspection and repair service you provided the new occupant.
You can hold the original subscriber to the contract terms. Your legal theory for holding the new occupant is that it 1) assumed the obligations of the old owner’s contract; 2) it received a contract from you and continued its performance by paying you and providing information, so it did in fact enter into the contract without signing it, 3) it ratified the terms of the contract without having signed it. I suppose there more theories a good [a not so good lawyer probably can conjure up even more theories] can come up with.
What is really need to know is that you never should have continued service once you knew there was a new occupant. You get a new contract signed, or the old one assumed in writing, or you terminate service, immediately. And, for fire be sure to notify the AHJ. You are under no duty, legal, contractual or otherwise, to continue providing any service with anyone you don’t have a contract with. That general statement may not apply however once you started providing that service without a written contract. You open yourself up to at least two theories I can think of, 1) that you have a verbal agreement to provide the services, maybe for free or certainly at will [the customer’s at will, not yours], 3) having performed you now have to perform in a reasonable way without exposing anyone else to danger [which is why you can’t just walk away, sometimes].
So, for starters, no contract, no service. Period.
Often I hear that the alarm company doesn’t want to pursue the real party it should, the original customer, and that’s usually because the alarm company has other properties with the customer or other personal reasons. I get it; it’s probably a good business decision unless the contract you’re about to let go is the single reason you’re able to stay in business profitably.
Another important factor is the RMR. Is it $75 a month, $750 a month or $7500 a month? What is the remaining term on the original contract, several months or several years? Is the original contract a K&K contract that you can send to K&K’s collection department, or are you swinging in the breeze with your claim?
Assuming you have some email or letter correspondence with the new occupant and a new contract filled out, and it’s a K&K contract with original subscriber and on a K&K form contract with the new occupant, if you sent the matter to K&K we are likely to recommend going after both old and new owner. If the amount in dispute isn’t enough to mean anything to you then we shouldn’t bother; otherwise, we’re waiting on you.
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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
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