Security Dealer & Integrator

AUG 2018

Find news and information for the executive corporate security director, CSO, facility manager and assets protection manager on issues of policy, products, incidents, risk management, threat assessments and preparedness.

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August 2018 / Security Dealer & Integrator 27 someone like John makes what could be a material modification to a security services contract. Who Can Modify a Contract? As a general rule, technicians and sales personnel should be trained by the company and its lawyers on the contents and meaning of the compa- ny's consumer contracts – particularly the limiting terms. Indeed, it is a good practice and can aid the enforceability of the contract if technicians and/or sales personnel are trained to point out certain key terms to the customer. e systematic and in-person identi- fication of such provisions makes them more prominent and conspicuous (as does bolding or underlining them) and, therefore, more enforceable. However, modifying a contract is a far more consequential endeavor than pointing out some of its key terms. Bluntly, contract modifications should never be the province of technicians and sales personnel – unless you work in a very small company and your technician, sales staff, CFO, CEO and janitor are all the same person! Instead, companies of any substan- tial size and sophistication should have very clear policies mandating that only a select few personnel have the authority to modify consumer con- tracts. ese policies should be made known to all personnel so that, when confronted with a proposed change by a customer, technicians and sales per- sonnel can readily state that they have no authority to modify the contract. is is not to say that every pro- posed modification should be univer- sally rejected; in fact, that would be foolish – as the standard for enforce- ability of a contract (particularly a consumer contract) is partially based on whether the contract represents the result of a bargained-for exchange. Contracts that are formed unilaterally are at risk of being deemed unenforce- able – particularly where the relative bargaining power may be uneven. See us at CEDIA 2018 booth #4352 See us at CEDIA 2018 booth #4352 Electrical Security Datacom Telecom Residential 805.384.2777 We Make Connections EZ! ª Cut Strip Terminate Test • Steel with polypropylene over-mold for easy cable slide • New Snap Lock Retainer firmly secures cables • Sizes 1" to 4" HPH16 (1") HPH32 (2") HPH48 (3") HPH64 (4") • Standard, 90 degree Angled, Batwing • cULus Listed • RoHS & TIA Compliant • Plenum Rated Cable Management for Modern Installs New! HPH J-Hooks High Performance Hybrid Request information: Just because John had apparent authority does not mean that the con- tract modifications that he and the Smiths made are enforceable. ere are a host of other factors to be considered – such as what was modified, whether the language used was clear and unam- biguous, whether the changes con- flict with any existing provisions, and whether the changes were made con- sistent with any terms specifying how the contract is to be modified (i.e., a merger and integration clause). Ultimately, your company does not want to resort to these second- ary arguments – but would be better protected if John made good choices. As he learned, contract modifications are tricky. So, train your people, seek advice from counsel, prepare sophisti- cated contracts…and keep John away from the Smiths. ■ Vesting select personnel with the authority to modify contracts does not mean that someone like John lacks apparent authority to modify the con- tract. Apparent authority is a doctrine that people like the Smiths can invoke to suggest that they relied, to their det- riment, on the seeming authority of the person modifying the contract. In this example, John was a repre- sentative of the company: he presented the contract, and he agreed to the modifications. e Smiths could argue that John's actual authority was irrel- evant – and that the company should be bound in any event. For what it is worth, apparent authority is circum- stantial. Consider, for example, that the receptionist at my law firm proba- bly has actual and apparent authority to bind the firm to a lunch order, but not to a building lease.

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