Re: Self renewing contracts?

["Bob Worthy" <securinc@xxxxxxxxxxxxx>]

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.


<paulctr@xxxxxxxxxxxxx> wrote in message
news:nv31i1d1veormmtml81ss2841tntapqk0i@xxxxxxxxxx
> 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?