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Subscriber Agreements

Subscriber Agreements Why? And What’s Important? Alarm companies – particularly those just starting out in the industry – often have problems coming up with workable, “fair and justifiable contracts to define the relationship between them and their subscribers.” Many express fear regarding the “legalese” that is involved with most contracts, and see the paperwork as [...]
Subscriber Agreements

Subscriber Agreements Why? And What’s Important?

Alarm companies – particularly those just starting out in the industry – often have problems coming up with workable, “fair and justifiable contracts to define the relationship between them and their subscribers.”

Many express fear regarding the “legalese” that is involved with most contracts, and see the paperwork as just another impediment that could get in the way of closing the deal. It does not need to be so.

In the 21st century, many Canadians are taking a lead from our friends in the USA and are showing a willingness to be more litigious than in the past. Discerning alarm company owners and managers will understand the need to protect the assets of the company while continuing to offer good, reasonably priced service that will offer a perception of value that is consistent with the customer’s expectations.

CSI Magazine is not in the legal profession. We do not wish our thoughts to be interpreted as legal advice regarding the specific wording of your Subscriber Agreements. But we have come across many situations where dealers (some of them quite large by Canadian standards) are often very proud of the fact that they do not require their customers to sign any contract at all – just a verbal agreement or a form of purchase order that covers the costs involved and very little more.

We suggest that is not enough!

The following is a list of clauses that should be included, but there are probably others you could consider. We suggest that you do your best to get your hands on a typical agreement from one of the larger national or multi-national companies.

You should also make yourself aware of the consumer protection laws in your area of operation as well as any police and/or fire response by-laws.

Finally, and most important. FIND A GOOD LAWYER and seek counsel before finalizing your Subscriber Agreement.

What should a good Subscriber Agreement contain? Here are some suggestions:

  1. The Legal Name of your company, along with its address, telephone number(s) should be clearly defined.
  2. The Legal Name of the customer, complete with its legal address, telephone number are required. Moe’s Diner is not good enough. Is there a registered company behind it? Is it perhaps 1234 Canada Inc. that owns Moe’s Diner? In such instances, Moe’s Diner is not a legal entity – and there may be no recourse for you to take legal action, should they fail to pay you for your services. If there is no corporate identity associated with the site, you may be better off to make out the contract to Moe Jones, operating as Moe’s Diner. Be sure to obtain the legal address of Moe Jones as well.
  3. We suggest that if the Agreement is for monitoring of a dwelling or home on behalf of a married (or even common-law) couple, the names of both parties should be shown and that you should use and/or in the name, such as Susan and/or John Smith. In this 21st century, when many marriages fail to last as long as your agreement, you should be sure to be able to accept instruction from either party. If the agreement has been made out to John Smith only, and he moves out of the home, you may be in a difficult spot if Susan calls and asks for John’s name to be removed from the list of authorized persons or contacts.
  4. The agreement should have a beginning and an end! When is the installation to be started? When will monitoring (or other monthly fees) start? What is the duration of the agreement? When will the customer’s financial commitment to you end? When will your commitments to the customer no longer be required?
  5. Automatic renewal of the agreement is very desirable. We suggest a clause that reads something like, “This Agreement will automatically renew for periods of one year unless either party notifies the other in writing at least 90 days prior to the expiration date of this Agreement or any renewal thereof, of their intention to terminate the Agreement.”
  6. There should be a NO LIABILITY clause that brings to the attention of the subscriber, that you are not an insurer. They should continue to have insurance coverage, and that the services rendered by you and your monitoring company have no relation to the value of the property and its contents. This clause should deny any liability on your part.
  7. Furthermore, there should be a LIMIT OF LIABILITY clause that says, in effect, “even though we accept no liability whatsoever, if a court finds that we are, in fact, liable, the limit of liability shall be X Dollars”. You and your lawyer should decide what a fair limit is.
  8. The amount of money to be charged for the monitoring and/or maintenance should be clearly spelled out, as should the method of payment.
  9. We think you should consider making sure that all recurring monthly fees are payable by Automatic Bank Account Withdrawal (Pre-Authorized Payment Plan [PAPP]). History has shown that attrition rates for those accounts that pay by PAPP are far lower than those who pay monthly, quarterly or annually by cheque upon receipt of an invoice.
  10. There should be a clause that stipulates that you are not responsible for the failure of others to perform according to plan. The actions (or lack thereof) of suppliers such as telephone companies, GSM providers, police responders, fire departments etc. are beyond your control and you should stipulate that in your agreement.
  11. There should be a clause that specifies that it is the subscriber’s responsibility to test the system regularly to be sure it is working properly and transmitting to the monitoring station in the desired fashion. This is especially true as more and more homeowners opt to eliminate their regular telephone service and replace it with cellular and/or VOIP service.

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Written by CSI Magazine

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