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How to Write an Alarm Monitoring Agreement

Aug 15, 2019 8:00:00 AM

If you are a new dealer, you probably don’t have a lawyer that writes contracts for you. You can purchase contracts, but that option can be pricey. Below, we will discuss how you can create your own monitoring agreement, and the main components of the agreement that will keep your company protected.

Where To Start

There are really five main parts to a monitoring agreement:

  1. Dealer information
  2. Services
  3. Terms of service
  4. Insurance and liability
  5. Agreement

1. Dealer Information

Contracts usually being with the dealer’s and subscriber’s information. This information clearly defines who is presenting the terms, and who is agreeing to them. This section requires the dealer to date the agreement, and the name of the dealer who is signing the contract. It should look something like this:

monitoring-agreement_si

2. Services

The services section of the contract should include the services you intend to provide the subscriber. This also will include when the services start. This allows the dealer to clearly delineate in specific terms what is being offered to the subscriber. For example:

Monitoring Services: Service begins when (DEALER) has billed and processed the subscriber, and alarm signals sent from subscriber’s alarm system has been received and validated by our alarm monitoring company.

The (DEALER) receives certain transmissions including, (WHATEVER YOUR COMPANY ACTUALLY MONITORS) and (WHOEVER YOUR COMPANY COMMUNICATES WITH e.g. SUBSCRIBERS, POLICE, FIRE, MEDICAL, EMERGENCY, AMBULANCE, etc.) and (WHEN e.g. 24/7).

You can also include any provisions such as, that the monitoring company can choose to amend the deal without prior notice.

3. Terms of Service

This includes the length of the deal, and how annual renewals occur if they cycle automatically. It should also include how many days notice of cancellation the monitoring company wants. For example:

Term: This agreement is for (NUMBER OF MONTHS OR YEARS). This agreement will automatically renew at the end of the initial term unless (DEALER) is given (NUMBER OF DAYS NOTICE) of cancellation.

Payment Terms

This section explains the amount that the subscriber will owe to the dealer. The contract should also explain when invoices are sent, and when payment is due.

Payment Terms: (SUBSCRIBER) agrees that the services which (DEALER) provides. It has been negotiated between (DEALER) and (SUBSCRIBER) that (AMOUNT) billed to (SUBSCRIBER) each month for the services described.

It is also common to see language that protects the dealer from legal fees, and credit card transaction fees. For example:

(SUBSCRIBER) agrees to pay (DEALER) reasonable collection costs, including attorneys' fees. With prior written consent by (DEALER), payments may be made by credit card, but are subject to a (TRANSACTION FEE), which (DEALER) may change, at its sole discretion.

You can also define the consequences for making past due payments. You can choose to include a grace period for late payments and/or suspend or cancel the account due to late payments. An example of this is:

In the event of a past due payment, (DEALER) will allow up to (NUMBER OF DAYS IF INCLUDING GRACE PERIOD) of the payment due date. If no payment is received with the (GRACE PERIOD) (DEALER) (CHOOSE YOUR LATE PAYMENT CONSEQUENCES).

4. Insurance and Liability

This section of the contract protects your company from any potential damages. It also should clearly define your limitation of liability. For example:

Limitation of Liability: The (DEALER) their agents, employees and subcontractors are not insurers and are exempt from liability for any risk, damage, loss or injury that may result upon the failure of the alarm system to operate or from the failure of any monitoring of the alarm to respond for any reason. The (SUBSCRIBER'S) payment to (DEALER) is for services only and not for protection or insurance. (SUBSCRIBER) agrees to indemnify (DEALER) from any claims or demands against (DEALER).

Without this section, you are opening your company up to damages that you could have otherwise prevented.

5. Agreement

The contract needs to end with the subscriber signing and dating the contract to signify they understand and agree to the terms. For example:

monitoring-agreement-2_si

This will finalize the contract, and make the agreement official. With these main components, you have the basic workings of a monitoring agreement. You can use this guide to help build your own contracts, and keep your company legally protected. You can also download a template of a monitoring agreement by clicking here.

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