The following article was written by the President of the Alarm Association of Florida, Robert Worthy, for its regular news magazine, the Handshake. It is posted here with Mr. Worthy’s permission:

Contract: an agreement between two or more people to do something, esp. one formally set forth in writing and enforceable by law.

I was going to write this article last month, but I was side tracked by the content of my May article. There are so many topics that are important and they should be passed on to the membership as we encounter them. The passing along of information should not be just from the Board of Directors on down, but between the members as well. This is one of the member benefits that a dollar figure cannot be attached. It is better to learn something and put it to use, in advance, than to learn about something by way of hard luck.

I just returned from a trip to Tallahassee. Bob Neely, our Executive Director and I went to Tallahassee to discuss a number of issues, about our industry, with the Attorney Generals Office and the Department of Business and Professional Regulations. This was a very interesting trip because it makes me aware that our Association is “the” trade association for our industry that is looked towards when government needs help.

In talking with the Attorney Generals Office representatives, it was told to us that the number one complaint, to their office in Florida, was about security systems. This was a surprise at first but the more I thought about it, the comment didn’t surprise me at all. Today’s consumer doesn’t settle for the first answer they get when they have a problem.. They keep climbing the ladder until they get some satisfaction and we all know that the squeaky wheel gets the grease.

With enough complaints, the AG office has no other option but to investigate the situation. In doing so, the first item that is looked at is the agreement that has been entered into. This exercise opens up a can of worms and definitely gives the AG office a good idea of how this industry operates. I am not going to go into all that was discussed, with their office, because most of the discussion was about items that we all know and which most of us follow.

The Attorney Generals Office did ask us, as the recognized trade association for our industry, to get the word out to the industry about the content or lack thereof in our contracts with our customers. We agreed to continue our efforts in educating our membership about the requirements we all must adhere to.

There are items, according to the Florida Administrative Code, that must be made part of our contracts for future services, i.e.; monitoring and service agreements. We all know about the three day right of cancellation. The next part of this article is taken directly from the Florida Administration Code.

FLORIDA ADMINISTRATRIVE CODE

ANNOTATED

TITLE 2. DEPARTMENT OF LEGAL AFFAIRS

CHAPTER 2-18 CONTRACTS FOR FUTURE CONSUMER SERVICES

PART 1. GENERAL

Current through March 1, 2002

2-18.02 Disclosure and Cancellation.

1) As used herein, a contract for future consumer services is any contract which includes a provision for consumer services to be rendered in the future on a continuing basis.

2) It shall be an unfair or deceptive act or practice for the seller of future consumer services to fail to furnish a buyer with a fully completed copy of any contract pertaining to such sale at the time of its execution and which shows the date of the transaction and contains the name and address of the seller and in immediate proximity to the space reserved in the contract for the signature of the buyer or on the front page of the receipt if a contract is not used and in bold face type of a size of 10 points the following statements:

CONSUMERS RIGHT OF CANCELLATON

YOU MAY CANCEL THIS CONTRACT WITHOUT ANY PENALTY OR OBLIGATION WITHIN 3 BUSINESS DAYS FROM THE ABOVE DATE, AND RECEIVE A FULL REFUND OF ALL PAYMENTS MADE TO THE SELLER.

YOU MAY ALSO CANCEL THIS CONTRACT IF UPON A DOCTOR’S ORDER YOU CANNOT PHYSICALLY RECEIVE THE SERVICES OR YOU MAY CANCEL THE CONTRACT IF THE SERVICES CEASE TO BE OFFERED AS STATED IN THE CONTRACT. IF YOU CANCEL THIS CONTRACT FOR EITHER OF THESE REASONS, THE SELLER, (NAME OF SELLER), MAY KEEP ONLY A PORTION OF THE CONRACT PRICE EQUAL TO A PRO RATA PORTON OF THE TOTAL PRICE REPRESENTING THE PROPORTION OF SERVICES YOU USED OR COMPLETED, PLUS THE COST TO THE SELLER OF ANY RELATED GOODS WHICH YOU HAVE CONSUMED OR RETAINED.

Nothing required in this disclosure shall prohibit the use of a notice in lieu of the above notice, which advises the consumer of a broader right of cancellation.

3) The contract forms or promissory notes used by the seller of the future consumer services shall also disclose the following warning to potential assignees in capital letters in10 point bold face type:

THE CONTRACT OR NOTE IS FOR FUTURE CONSUMER SERVICES AND PUTS ALL ASSIGNEES ON NOTICE OF THE CONSUMER’S RIGHT TO CANCEL UNDER CHAPTER 2-18, FLORIDA ADMINISTRATIVE CODE.

4) It shall be an unfair or deceptive act or practice for a seller of future consumer services or his assignees to fail or refuse to honor a buyer’s request to cancel a contract, which request is made in accordance with the cancellation disclosure contained in the contract for future consumer services.

5) It shall be an unfair or deceptive act or practice for a seller of future consumer services to fail to issue a refund within 20 days after receipt of notice of cancellation made in accordance with the terms of the cancellation disclosure contained in the contract for future consumer services.

Specific Authority 501.205 F.S. Law Implemented 501.204 F.S. History—New 2-1-74, Formerly 2-18.02, Amended 6-19-96.

2 FL ADC 2-18.002

End of Document

I would bet that most contracts in the State of Florida do not have this language incorporated into them. Please contact your attorney or Mark Neuberger, the Association’s general counsel, with any questions. Your contracts are your largest asset. Do not wait until your contract is in question. Do it now!