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MShore Law
MShore Law, Attorney
Category: Business Law
Satisfied Customers: 25285
Experience:  Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements
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Can a service member who is being deployed out of state terminate

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Can a service member who is being deployed out of state terminate his 3 year alarm contract without penalty. We generally charge 75% of balance of contract but service member claims that the Service Members Civil Release Act of 2003 prevents our company from forcing him to adhere to the contract termination clause.
Thank you for the post, I am happy to assist you by answering your questions. Am I correct to understand that a component of your alarm contract is the lease of equipment?
Customer: replied 3 years ago.

If a customer fulfills the 3 year agreement, then the equipment belongs to him/her. If the customer defaults then he/she is responsible for 75% of the balance of contract. If the customer is sent to collections, they have signed a waiver stating that they are not only responsible for the balance of contract, but for equipment costs, sales commissions, installation costs and any collection fees. This customer is being deployed and states he should be let our of his contract. We are saying no.

ok, is it accurate then to say that prior to fulfillment of the three year agreement the customer is leasing the equipment?
Customer: replied 3 years ago.

No, the customer is not leasing the equipment. We cannot take back the equipment if the customer defaults because we cannot install used equipment into someone's home.

you mentioned before that "If a customer fulfills the 3 year agreement, then the equipment belongs to him/her." This suggests that prior to the fulfillment of the 3 year agreement the equipment does not belong to the customer. Also, the fact that you cannot install used equipment does not mean you cannot take it back, it means you cannot take it back and install it, you can take it back and dispose of it or recycle it, yes? (or do I misunderstand?)
Customer: replied 3 years ago.

Yes, we can take it back and dispose of it. However, in this particular case, the customer does not have access to his previous home so the equipment cannot be retrieved.

Was the customer leasing the property?
Customer: replied 3 years ago.

I hope not. The contract specifically states that he must be the homeowner in order to sign up for alarm service. He signed and initialed where it states he is the homeowner. We do have a renter's program, but that is not what he signed up for.

Why can he not reneter the property?
Customer: replied 3 years ago.

The house was sold and he has no access.

Thank you Jean, the customer is correct in that the Servicemember's Civil Relief Act prevents ANYONE from charging a early termination fee due to military orders taking him to somewhere where he cannot continue service (including deployments). Your alarm contract is a service contract, which is covered under the SCRA. However, the customer has the obligation to return your equipment or cause it to be returned and the failure to do result in you suing for its replacement value. I understand that you cannot re-install it, but that does not mean it is of no value, if properly functioning its replacement value is the sum it would cost if sold independent of the service. I want to make sure I have answered your question. If I have not answered your question or if you have any follow up questions please let me know. If I have answered your questions, please positively rate my answers. If you have follow up questions, please let me know.
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Customer: replied 3 years ago.

What happens if the serviceman does not sell the house?

That would not have a bearing on continuing liability for the service agreement.