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What’s your cancellation policy?
October 26, 2020
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Title:  Importance of Sound Financial Management; How to make your company bankable
When:  November 4, 2020   Time:  12 PM  noon ET
Presented by:  Mitch Reitman
Hosted by:  Ken Kirschenbaum
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What’s your cancellation policy?
            We have a client cancelling a project. We are being what we believe as very fair in only charging them for equipment that we cannot return and some labor that we consumed on the engineering side.
            They are asking where in the contract language it says there is a cancellation provision.  
            I assume we could enforce the contract so offering to refund them money seems very generous. The contract is the Commercial All in One and we are installing a security system and there is one year monitoring RMR.
            How should we proceed?
Thank you,
Name withheld
            The cancellation provision you’re looking for isn’t in the Commercial All in One, and it’s not in any of the Standard Form Agreements; there is no right to cancel in the form agreement.  That’s not to suggest that you may agree to modify the contract or attach it to a contract provided by the Subscriber.  In your case there is no modification of the standard form and there is no right to cancel.
            Both you and the subscriber have, for some reason, couched the issue as “early termination” instead of what it really is, “breach of contract”.  And, breach of contract is expressly dealt with in the Agreement; it’s in the Legal Paragraph.  You are entitled to 100% of the work you performed, your profit on the balance of the installation that you won’t be performing, and 80% of the monitoring charges for the contracted one year monitoring services.  That’s a lot more than you thought.  Also, you are entitled to recover your legal fees if you begin proceedings to enforce your contract.  In your case we would commence arbitration to enforce the contract.  
            By acting quickly to enforce your contract you may find that the subscriber changes its mind and continues with the contract.  It’s a pretty easy analysis.  Since the subscriber is going to be required to pay for most of the contract it may as well get the benefit of the service.  
            Some alarm companies have very few subscribers who “default” [another way of saying “breached the contract”].  You should take a moment to determine whether the Subscriber has a meritorious reason for terminating the contract and whether you should excuse further performance by the subscriber.  It could be that the Subscriber has gone broke, bankrupt or other issue that would suggest that you will not get paid if you continue with the contract or pursue the subscriber for collection.  But a subscriber who cancels because a better deal came along or some unreasonable personality conflict probably deserves little sympathy.  Your next consideration is whether you are better off pursuing the subscriber or just moving on.  K&K’s collection department can assist you in evaluating a collection matter. K&K processes hundreds of cases each month; the staff is trained well, and since the collection department works on contingency the staff will rout out cases that shouldn’t be pursued and will also be in the best position to recommend a resolution of the matter.  Contact Kathleen Lampert at 516 747 6700 x 319 or for collection matters.

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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