The alarm business is built on recurring revenue and is supported by written contracts. The longer your contract, the more valuable the contract is to the alarm company. By that we mean not how many pages the contract is, but for what period of time does the subscriber obligate itself to pay the alarm company and concomitantly, the period of time the alarm company agrees to provide its service - generally monitoring, service, lease of the systems, etc.

My standard contracts have term of contract preprinted in them. The residential contracts -- for monitoring and service – are pre-set at 5-year terms. Fire inspection is for seven years. Commercial lease is 10 years.

I get telephone calls and emails regularly asking me if the term of the contract can be changed. Nine out of 10 of these calls want to shorten the term, sometimes to three years and sometimes even to a quick one-year term. The alarm company seeking to provide for the shortened term always expresses the rationale that its subscribers want a shorter term and competition is to fierce.

My response is always the same. You can shorten the term to anything you want, but why would you? Keep it as is and if a particular subscriber wants a shorter term then cross out the number and insert whatever number you want for the term. Most subscribers are going to sign the contract with the preprinted term, and that term is going to be longer and more valuable to you than a shorter term contract.

How do we pick these terms? Part of this is custom and practice in the industry. The other aspect is profitability (I’ll get to that below).

Are there statutes that limit the length of contracts? Not many if there are any, and I don't know of any.

Will Consumer Affairs offices or Attorney General offices complain about terms in contracts? Yes, and you need to be careful not to offend common sense, which is another way, in less legal technical terms, of being certain your contract and the term length is not unconscionable.

Will courts enforce long term contracts? Not if they are unconscionable, which means shocking to the judge. Expect an unconscionable contract to be loosely defined as one that someone of right mind would not sign and one that someone of right mind would not offer to be signed.