KEN KIRSCHENBAUM, ESQ ALARM - SECURITY INDUSTRY LEGAL EMAIL NEWSLETTER / THE ALARM EXCHANGE You can read all of our articles on our website. Having trouble getting our emails? Change your spam controls and whitelist ken@kirschenbaumesq.com ****************************** who is responsible for contract and warranty work, buyer or seller Part 7 May 9, 2025 ********************* who is responsible for contract and warranty work, buyer or seller Part 7 ********************* This is part 7 of in the buy sell series. If you missed the earlier articles they can be found on the Kirschenbaumnesq.com website under Alarm Law Articles. A representation buyer will request pertains to contract and warranties that the seller has committed itself to providing. First the contract work. This is often referred to as Work in Progress and most sellers will have WIP going into a sale of the accounts unless the company has been stagnant with no sales or installation; maybe no outstanding service either. WIP will need to be identified in a Schedule and the buyer and seller will need to figure out what part each of them are entitled to for the balance to be paid by the customer for the installation. A seller who has completed the work should get all of the balance owed for installation, and a job that has 50% left to complete, post-closing, will have to have enough owed by the customer to pay the buyer or the seller will have to adjust for receiving overpayment on the job. This should be worked out by the buyer and seller, not by their attorneys, and the appropriate representation in the buy sell agreement is that the WIP is identified in the Schedule and the allocation for completion and payment or adjustment noted for each job. Warranty work is another issue. A buyer has a right to know if any warranty work is outstanding. Warranty work comes in two types, warranty work that is know, perhaps already requested, and warranty work that can still be requested because the warranty period is still available. This could involve essentially free service for the life of the contract depending on the warranty. Seller should represent what warranties are outstanding, especially if warranty work has been requested. This will be an adjustment at closing or after closing because a buyer should not be saddled with the cost of warranty unless it's explicitly part of the buy sell deal. This should not however be confused with unknown work, unless it pertains to failure to install equipment required by contract and already paid for. For example, a customer contract calls for 15 cameras; buyer finds out after closing that only 12 cameras have been installed and now customer wants the other 3 cameras. This should be a seller expense. If unfinished work can be identified by the seller and scheduled in advance then an adjustment can be made, alleviating post-closing surprise and dispute. Who, as between seller or buyer, is responsible for post-closing work usually follows the money to be paid by the customer. Per call service requested by customers post-closing, even if known before, won't matter because buyer will be paid for the service. Customers on service plans however have already paid seller and buyer should not be taking over accounts that have outstanding service requests that the seller should have taken care of. These like most issues are subject to negotiation, but you need to know about the issues so you can address them. ******************** STANDARD FORM AGREEMENTS: To order up to date Standard Form Alarm / Security / Fire and related Agreements click here: www.alarmcontracts.com *************************** CONCIERGE LAWYER SERVICE PROGRAM FOR THE ALARM INDUSTRY - You can check out the program and sign up here: https://www.kirschenbaumesq.com/page/concierge or contact our Program Coordinator Stacy Spector, Esq at 516 747 6700 x 304. *********************** WEBINARS: https://www.kirschenbaumesq.com/page/alarm-webinars *********************** ALARM ARTICLES: You can always read our Articles on our website at www.kirschenbaumesq.com/page/alarm-articles updated daily ******************** Wondering how much your alarm company is worth? Click here: https://www.kirschenbaumesq.com/page/what-is-my-alarm-company-worth *********************** THE ALARM EXCHANGE - the alarm industries leading classified and business exchange - updated daily ************************* PODCASTS: https://podcasts.apple.com/us/podcast/ken-kirschenbaum-presents/id1794851477 ************************* Getting on our email list / Articles archived: Many of you are forwarding these emails to friends or asking that others be added to the list. Sign up for our daily newsletter here: Sign Up. ************************** 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
