Re: Automatic Renewal Prohibited

["Bob Worthy" <securinc@xxxxxxxxxxxxx>]

"Nomen Nescio" <nobody@xxxxxxxxx> wrote in message
news:374a99cdd71b7d57f565e61e7211f925@xxxxxxxxxxxx
> J. @netscape.net said:
>
> >I'm curious as to what legally happens once the contract expires.
> >Does the relationship between the alarmco and subscriber legally cease
> >to exist?  who is responsible for initiating a new contract?   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?  If the alarmco
> >continues billing and the subscriber continues paying, does this imply
> >a voluntary extention of the contract.  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.
> >However, automatic renewals clauses ensure the conditions of the
> >service being provided are legally defined regardless of the terms of
> >the contract.    If the system is being leased, the customer would be
> >bound by the terms of the lease agreement regardless of services being
> >provided.
>
> Here's my guess.  When the contract expires, if the alarm company sends
out
> a bill, that's an offer to renew the contract for the length of time
> covered by the bill.  If the subscriber pays it, he's accepted the offer,
> but is only bound for the period the bill covers (quarterly billing =
> quarterly contract, annual billing = annual contract).

Makes sense on the surface, but let me ask this, what happens if the bill is
sent out and the company continues to monitor in good faith. An incident
happens prior to recieving the payment. How does the insurance company look
at it. They see an expired contract and no payment received, regardless of
intent to pay, and your insurance is based on the existance of an agreement
which is in force. Now what? I have clients that are under contract and we
bill in advance as is customary, however the clients are in the mind set
that they will not pay until after they have received the service. (old
folks, old school) The receivables show they are 90 days late. They have
been that way for 15 years. It doesn't bother me because they pay like
clockwork on that 90th day. But, if they were not under an agreement,
because of expiration, that relationship would be way to risky for both of
us.

> If automatic renewals are prohibited,

Bad legislation. To bad they don't do their homework before passing bills.

 then the alarm company has no further
> contractual obligations once the contract expires, assuming the subscriber
> doesn't pay the renewal bill.
>
> The sticky legal problem arises if the contract hits its expiration date
> and the subscriber is a month late sending in his next payment.

Sorry, should have read the entire post before posting the above. We are on
the same page.

> I would
> argue that if the subscriber continues to use the system, he's agreeing to
> the same terms that were previously in effect.

Wouldn't it be great if we could argue our points of common sense.
Unfortunately, the courts don't give us that opportunity when the laws are
already in place. Back to bad legislation. Should have been argued there. If
the industry in these states were to get unified, spend some money on a good
lobbying effort, got the right senator and representative behind them to see
the problem, the law could probably be amended to protect everyone, client
and company. What I see here is that in some of these states, the industry
is very weak with really has no major presense and the others, the industry
is not unified enough to be effective. This is what happens.