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Subcontracting paid if or when clause / Comment on Subcontracting for Other Alarm Co / cs webinars continue
August 4, 2020
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Electronix Systems Central Station Alarms - August 6, 2020
Subcontracting paid if or when clause
            When subcontracting there are two provisions that you should be aware of, the “paid if paid” and “paid when paid”.  These are entirely different provisions, and easily understood.
            Paid if paid means the GC [or other company hiring the subcontractor] will be responsible to pay the subcontractor only if it gets paid by the owner [or whoever is responsible for paying].  This provision shifts the risk of getting paid to the subcontractor.  This provision is not favored by courts and in fact is unenforceable in some states.
            Paid when paid means that the GC doesn’t pay the subcontractor until payment is received from the owner.  While that may be all the provision provides, the law will imply a “reasonable” time for the delayed payment even if the GC hasn’t received payment.  If you want to avoid waiting or making payment to the subcontractor contingent on payment from the owner then the subcontract should provide for a payment schedule.  Completing of the subcontracting work should trigger full payment.
            K&K offers a Standard Subcontracting agreement, which comes in two forms, if you’re the one hiring or if you’re the subcontractor.  You should let our Contract Administrator Eileen Wagda [516 747 6700 x 312 or know because the two forms flip some of the provisions, depending on whether we are drafting it for the hiring company or the subcontractor.  We will give you both forms if you like but we don’t want you to be confused if you don’t need both.
Comment on Subcontracting for Other Alarm Companies
From July 27, 2020 article

            I see that Anon has surfaced again.  This guy asks some great questions.  On July 27, 2020 he asked if he needed a contract when doing work as a subcontractor for an out of state alarm company.  This reminds me of the Penzoil commercial from the ‘70’s in which the guy said “Pay me now or pay me later.”  
            Our office, as does yours, performs the equivalent of doing an oil change, for our smart clients.  We also do the equivalent of engine rebuilds for those who thought that they were saving a few bucks.  Doing work for another alarm company isn’t a bad thing, if you do it right.  This is the kind of thing that any company should run by Ken’s lawyers (especially by using the Concierge Program) to address potential issues (like is the other company licensed in your state and are you becoming a party to an unenforceable contract) before they become issues.  Spend a few bucks, save a lotta bucks.
 Mitch Reitman 
Reitman Consulting Group
Fort Worth, TX 
            Let’s start with the basic tenet, don’t do any alarm work without a written contract.  That applies double if you’re a subcontractor.  Why double?  Because you need to have two contracts, not one.
            The first contract is between the company doing the hiring and the subcontractor.  The parties need this so they understand, and memorialize, their agreement, including but not limited to scope of work, warranties, payment, insurance, etc.  Get this contract here: 
            The other contract is between the hiring company and the customer.  Why does the subcontractor care about this contract?  At least two reasons: 1)  this contract may be referenced in the Subcontract Agreement as an additional document incorporated by reference and contain provisions that the subcontractor is required to comply with, such as insurance, work schedule, wages, etc., and 2) since the subcontractor is not going to have any direct contract with the customer the subcontractor will be depending on the hiring company’s contract with that customer.  If the hiring company doesn’t have a contract with the customer that the subcontractor has reviewed then the subcontractor may be doing the work without any contract protection or poorly drafted contract protection [which may be no protection].  You can’t do alarm work without a contract.
            Like most any contract, you should enter into it only if you understand the terms and get legal advice if you don’t.  It’s one thing not to like certain provisions; it’s another not to understand them [and those are the ones you won’t like].
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Electronix Systems Central Station Alarms - August 6, 2020
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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