Re: Automatic Renewal Prohibited

["Robert L Bass" <robertbass1@xxxxxxxxxxx>]

> I'm curious as to what legally happens once
> the contract expires.

That depends on where the protected premises is.  Different states have different laws.

> Does the relationship between the alarmco
> and subscriber legally cease to exist?

Usually not, but the naturew of the relationship is modified.  If the homeowner continues to make payments and the alarm company
continues to provide services, most if not all of the provisions of the contract remain in effect.  By continuing to pay the
homeowner can be said to have constructively assented to the terms unless he has made a counter offer or made some demand for a
change of terms.  For example, if the client sends a letter before the cancellation date stating that he does not wish to renew the
contract, but he continues to make payments he has cancelled only the automatic renewal.  By making those payments he has assented
to the rest of the terms.

> who is responsible for initiating a new contract?

Either party can initiate a new contract though usually it is done by the alarm company.  The law doesn't care who takes the first
step.

> If something goes wrong after the contract
> expires like a failure to dispatch resulting in
> a death, does the alarmco bear no responsibility
> since there was no contract in place at the
> time?

That would depend on the rest of the facts.  If the two partied continue paying and sevicing, then the alarm company could be
liable, assuming that it failed to provide services for which it had been paid.  Most well-written alarm monitoring contracts
include limitation of liability and liquidated damages clauses.  If the contract remained in effect at the time of the loss, then
the terms of the contract would remain in effect, even if there was no signing.

Note that some states *require* an active assent by the client to enforce automatic renewal.  In such locations, either the renewal
alone might be voided or the entire contact might be null and void.  To be certain how things woprk in your state you'd need to
consult an attorney knowledgeable in alarm contract law.  You could also try sending an email to Ken Kirschenbaum.  His email
address is on his website, which I've referenced in a reent post.

> If the alarmco continues billing and the subscriber
> continues paying, does this imply a voluntary
> extention of the contract...

In most places, yes.

> It makes since to me that if a subscriber
> wants to cancel service on a system they
> own, there should be no reason why an
> alarmco should be able to hold them to a
> contract...

Beyond the initial term of the agreement, they shouldn't unless the client assents by signing or continuing to honor his obligations
under the contract.

> However, automatic renewals clauses ensure
> the conditions of the service being provided
> are legally defined regardless of the terms of
> the contract...

There's nothuing inherantly bad about automatic renewals.  Unfortunately, some companies use them in an abusive manner.  One common
trick is to require 60 or 90 days advance notice of cancellation.  The only reason for such a long advance notice is that most
people will forget t9 cancel until they receive another bill.  By then they're stuvk for another one, two or sometimes even five
years.

> If the system is being leased, the customer
> would be bound by the terms of the lease
> agreement regardless of services being
> provided.

True, until the lease expires.  At that point the client should notify the alarm company that he doesn't intend to renew.  Most of
the time the alarm company will leave the system in place, hoping that the client will change his mind later or that the next
occupant will sign up for services.  If the client notifies and the alarm company makes no effort to retrieve its hardware within a
reasonable period, the homeowner can consider the alarm system his to keep or dispose of as he pleases.  How long is "reasonable"
varies by jurisdiction.

--

Regards,
Robert L Bass

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Bass Home Electronics
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4883 Fallcrest Circle
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http://www.bassburglaralarms.com
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