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Advisory Notice: Smart-Home Services Require Equally Smart Contracts for Your Protection

Be Cautious How You Implement Your Go-to-Market Strategy When Offering Today’s Most Popular Smart-Home Platforms

By Joe Hurst, Sr. Vice President, DMP

May 9, 2018

Smart-home integration — it’s what the majority of today’s consumers want. And, in our interconnected world, we have the power to integrate disparate services and solutions into our alarm systems that allow consumers to use some of the most popular home automation products.

You can envision a typical scenario. For instance, you’ve installed a security system with an integration from Apple TV® that’s using the homeowners’ screen to look at their security cameras, or an Amazon Alexa® or Google Home Assistant® that arms their systems and controls their lights and locks, plus at the front door, there’s a video doorbell that lets them monitor their porch and front yard. Consumers love the convenience of it all and are encouraging Cloud-based services like these to expand. As they do, so too do our interests in developing third-party integrations in order to compete and continue meeting those demands.

As referenced in this article from the Electronic Security Association, these “MAGA” companies are getting involved in the security space — we are making their services available as an option through the use of our products, our Virtual Keypad app, or in other ways. At the same time, it is vitally important for your business to be mindful of these and other potential issues:

Understand third-party developer terms and conditions – Typically, the company that owns the service or product has the right to change features or cancel access to the service at any time, for any reason, often with no requirement for notice to the provider or user.

These terms are typically not negotiable. The only way to allow access to these consumer-demanded services is to agree with these restrictive conditions. The necessary byproduct is to understand that the company could decide tomorrow to remove the ability of our equipment to function with their service.

What does your contract say? As a result of third-party developers’ restrictive conditions, DMP suggests that you consult with your attorneys before contractually obligating your company to provide any third-party services as part of the paid contractual services you provide for end users. Your contractual language should apply appropriately to the way the law is written within your state.

Restrictive language can be added to your agreement. While security service is our core product, these MAGA companies have the financial power to step away from an entire market segment with little or no regard for their existing partnerships. If changes happen that modify or remove what is being delivered, you should not be responsible for guaranteeing that portion of the solution. Adding such language appropriately limits your requirement to deliver third-party services if the company providing those services no longer makes them available.

As DMP or any of your other partners continue to offer these and other new integrations and services, keep in mind that your offers and promises — either direct or implied — may not be possible for the life of your customer’s contract. There may be other exclusions or requirements that should be considered.

For example, in the above scenario of an Apple TV integration to an existing screen, consider these factors: Was the Apple TV installed by your company? Will the Apple TV integration immediately work with the next generation of that hardware? Could the company that makes that hardware discontinue it in part or in whole? With no guarantees of continued service, at best your customer would be left disappointed; however, it could become a potential liability for you if your contract is not crafted appropriately regarding these issues.

To that end, we strongly recommend that you have your attorney look at these and other issues and advise you of the best way to handle them, according to your state’s laws.

If you would like to discuss this matter further with a member of DMP’s Executive Management Group, please contact Senior Vice President Joe Hurst at Joe Hurst is the Senior Vice President of DMP with over 40 years of experience in the Alarm Industry, he not only oversees all of DMP’s Global Sales, but functions as its In-House Counsel.

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