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Price increase for delay or product unavailable once contract signed / More on how long to keep papers - opinion poll requested
September 28, 2021
Price increase for delay or product unavailable once contract signed
            Are we protected for price increases once we have a signed contract?
            The All in One agreements do have a provision that permits a 5% increase in contract price if the installation is delayed more than one year.  There is nothing presently in the Standard Form Agreement to protect against price increases for product, and that could be a problem.
            In case you don't watch Fox news, you may not know that we could be headed for a few economic problems.  Product shortage is leading to price increases and in addition to the obvious, difficulty or impossibility of getting products.  Inflation is here.  This may be a temporary problem [like 3 more years temporary] or the new reality for a long time.  If you use are concerned about increase in price or inability to get specific product you should provide for that in the Schedule of Equipment and Services.  A simple statement that subscriber shall pay for price increase between date of contract and date of installation and that you have the right to substitute alternative product if unable to get products promised in the contract [or the price increased and subscriber doesn't want to pay the increase]. 
            I'll consider modifying the Standard Form Agreements with this if enough of you think it's a problem.  Let me know.
More on how long to keep papers - opinion poll requested
    You recently indicated we should keep monitoring contracts for six years.  I have two differing opinions on how long records should be kept for the IRS; both are CPA's.  One says the current year plus three years and the other says the current year plus 7 years.  Would you send this out to the industry so we can see what the prevailing opinion is? 
Hank Luks, President
Controllor Security Systems
            OK Hank, here is your request for an opinion poll.  Anyone with an opinion is welcome to send in their 2 cents.
            The difference of opinion from two CPAs is odd.  There are IRS guidelines and I think records are to be maintained for 7 years.  A CPA or tax attorney is welcome to clue us in.
            How long you should keep records, particularly alarm contracts is not limited to IRS.  Ask a contract lawyer and you'll get one answer.  Ask a negligence lawyer and you'll get another answer.  Ask a lawyer who's negligent or not so smart and you'll get all kinds of answers, only two of which might be right, just like a broken clock.
            If you know that your subscriber had a loss and you know that there is a lawsuit as a result of that loss, you could be brought into that lawsuit many years later, even after the statute of limitations for contract or tort has expired.  [that would be a third party action against you].  Also, the statute of limitation is a defense, so you could be sued after it expired and you need to raise the defense.  Just try doing that by claiming that you have a contract that you can't find and can't put a date on. 
            Seven years is safe if you don't know of a loss for the customer.  A lesser time is also safe if you're not too concerned with IRS doing an audit and that is something you can generally rely on your accountant to advise you. 
            You can digitize your records; that should save some space.

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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