Legal in most states...however, auto-renewing for 3 years at a pop is strange, usually it's 1 year after the initial term unless the client signs a new contract. What if she were moving would they hold her to the contract? ;-)
Are these legal for monitoring? I have a potential customer that has monitored with pro1 for 7 years. She tried to cancel and they told her she would have to wait till next July because her 3 year contract had self renewed.
I live in SC. Any comments?
Paul,
You will get alot of different view points on this subject. When reading the different comments your post may bring just remember that regardless of peoples opinions, the renewal clauses are not illegal and very widely used. Don't look at this as an agreement renewing, but as an agreement expiring. What is worse, especially if the client has no reason or intention to cancel? The majority of the security industry will support the self renewing agreement. It is common practice and again, not illegal. There is a small percentage that will opt not to have a self renewal clause in their agreement, why I don't know, because it can cause some serious liability issues if something should happen. The companys liabilty insurance carrier most likely will not insure an incident when the property isn't under contract. The client is left out in the cold. They may be receiveing monitoring on a month to month basis, but their agreement expired, thus leaving them without an agreement required by the insurance company. This could also effect their homeowners insurance discount with their insurance carrier. We are constantly receiving calls from insurance companies to find out if the client is still under contract. Imagine the exposure of a commercial client that lets their ageement expire. If the client has a problem, who are they going to go to, the company? There is no contract. An agreement without a renewal clause is a huge burden on the company.......lets take the extreme for dramatic impact. ADT has 5,000,000 plus customers. What sort of man power would it take to go out to these customers to renew their agreement? An impossible task. That figures out to approx. 14,000 agreements a day that contact would have to be made. There are companies that use these agreements for collateral on financing, reporting to stock holders, and business planning. All understandable in the business world. There are a very small few, and some in this NG, that will tell you that the renewal clauses in these agreements are just short of armed robbery, kidnapping, rape and murder. Some are not even in the monitoring business but voice their opinion anyway, some are just happy as pie with their business plan in their own little corner of society, some think their way is the only way and everyone else is wrong, and some just talk (post) to talk (post) and don't know much about what they are talking about. I would bet that if you polled a good number of the 4000 plus legitimate security companys in the US, you will find that the self renewal clause is pretty much standard language. Many lawyers have looked at it and many courts have upheld these agreements. Granted there are some areas that have restrictions, limitations, etc. on renewals but it isn't uncommon to see it in the agreements. If a person is not happy with the service, the renewal does not go into effect if the client notifies the company of their intentions not to renew. This gives the company time to make financial adjustments. A large company may have literally hundreds of agreements renewing every month. If no one notified them and the contract just ended it could cause a large financial burden on the company and could possibly even effect the clients still under agreement. In this case the client was already two plus years into their renewal and didn't have a problem until it came to their attention. Bottom line is that the renewal clause in the contract didn't just appear one day out of the blue. It was there when the agreement was signed. The client had the three day right of refusal period to review the agreement and probably could have negotiated any changes they wanted or needed at that time. The company should not have to jump through hoops because someone didn't read or understand what they were signing. Now what will probably happen, regardless of how good of a relationship there may have been between them and the company, the client will be all pissed off and blame the security company for something he failed to do. The upside.....I'll bet they will read contracts from now on.
wrote in message news: snipped-for-privacy@4ax.com...
Here's the Deal in New York
Many Thanks to Ken Kirschenbaum @www.alarmcontracts.com for the Above Info
snipped-for-privacy@sbcglobal.net wrote:
I can auto renew provided the renewal term is specified in the contract and is not limited by other state laws. In some states it can only renew for one year and in some states you must notify the customer just before the automatic renewal takes effect.
Tell the customer to send a certified letter to p1 requesting a copy of her contract - they have to provide it cause thats the law in every state - and when you get it check to see if it is actually a valid contract. If they fail to provide a copy of the contract send another letter telling them any agreement is cancelled effective immediately.
Now, it may be that the contract they have is not even a contract the customer signed; it may be a contract somebody else signed and then they moved into the house and assumed it. Its not even valid in that case.
If the customer signed it and they only lease the property its not any good as the actual property owner would have to also sign and agree to it. If its a rental property the contract is pretty much worthless.
The contract may not even have an automatic renewal clause in it
If the monthly rate increases you always have the right to cancel at that time and not pay any increased rate of course the company could then decide not to increase your rate and you couldn't cancel.
You may get lucky and discover nobody representing the company ever signed the contract or that the contract cannot be transferred to p1 from whomever installed the original system.
In many contracts if some fatal happens to the system and you choose not to invest the money to replace it the contract will terminate at that point.
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