What Is a Security Guard Contract?
Security guard contracts fall under the category of service contracts within the fold of business contracts. Wholly separate from the purchase of goods or products, service contracts are agreements between a buyer and a seller for the performance or construction of some kind of service.
Defining the nature of the agreement and the responsibilities of each party to the contract are key to the arrangement. What both parties must be sure to do – and not do – are laid out in great detail in a security guard contract.
Much like other business contracts, a security guard contract is a legally binding agreement between two or more parties for the purpose of laying out the terms of an undertaking that will benefit them both.
While a seller or service provider agrees to provide something of value to the buyer , the buyer agrees to pay a certain amount of money and/or other compensation in exchange for that product or service. This entire transaction, legally speaking, falls under the umbrella of business law and is protected by the original contract.
Not only do service contracts fall into this category, but the same can be said of security guard contracts, which are one type of business service contract.
Although the contents of security guard contracts may vary from one to the next, there are some basic components that will always be included.
Each contract contains the following basic elements:
All of these details help to not only establish the terms of the contract but also help both parties determine what to expect from the other and who exactly is responsible for any given aspect of the arrangement.
Elements of a Security Guard Agreement
A security guard contract typically contains four key components. First, it outlines the scope of services, which is paramount to any contract. Second, the contract has a duration/cancellation period, which is also critical. Third, compensation for services also falls within the critical category. Fourth, confidentiality clauses are often included.
The scope of services may be as simple as a guard being hired to only walk the grounds of the facility. Or the scope of services may be more complex, requiring the guard to do both ground and internal checks of the premises. As such, it is important that the scope of services be specified within the contract so that any misunderstanding can be avoided. The scope of services may also include what the guard actually does if he or she encounters a problem or a potential problem. If the security guard is not allowed to contact the sheriff department for certain matters, then this should be outlined in the contract.
Duration is also critical to the contract between the security guard and the entity hiring him or her. For example, the duration may be for 6 months with the contract being automatically renewable at that time unless either side gives notice otherwise. Conversely, the agreement could be a one-time determination with no future renewal. Sometimes there is a one month cancellation period in the event that one party wants to cancel the agreement.
Compensation may sound almost too simple to need to specify in a contract, but since security guards often work with cash, there should be no mistake as to exactly how the guard will be compensated. Will the security guard be paid in cash? Will checks be provided? Bento boxes? Often times, compensation is paid out at the end of the shift. For some events, the compensation may not be paid out until a day or two later, when the guard will be acting as a cashier, as well as a guard, during a set period. The bottom line is that compensation should be clearly spelled out, as well as when it will be provided.
The final component of a security guard contract is the confidentiality clause. This is often overlooked but, is just as important as the other three. The confidentiality clause protects the hiring entity, and is especially important when guards are privy to information that is not yet known to the public. And even when the security guard is not privy to highly confidential matters about the company, it is still important to have the confidentiality clause. If the guard observes or hears something about the facility while on guard duty, and then discusses that information with anyone who is not affiliated with the facility, this could prove very embarrassing.
How to Create a Security Guard Contract
The initial step to drafting a in-depth and legally sound security contract is to sit down with a legal professional and find out about any restrictions or requirements that apply to the contract terms. You may also want to discuss the various strategies you can use to negotiate the terms of the contract to ensure that both parties fully understand and agree to all the terms.
Each contract generally should include some of the following components:
• Identification of the parties
• Important dates
• Outline of the services being agreed upon and provided
• The price to be paid and how payments will be handled
• Time frame of the lease
• Your obligations as the hiring party
• Relevant legal clauses, such as indemnification and confidentiality
• Signature lines for both parties
It’s important to remember that each and every security guard contract is different and must be customized to meet the specific needs of the jobs at hand. Make sure that you are careful about all the language used in the contract, that it is clear and comprehensive, and that it is signed by both parties prior to beginning work.
Security Guard Contract Pitfalls
Errors can take place early in the process. The security guard company may not have the necessary resources to satisfy the client. The company may have an adverse past-relationship with a particular client representative. Or the contract is being solicited by a purchasing company through an informational RFP, but there is no clear understanding of whether the intention of the bidder is to obtain volume business…. or merely to get hold of the specific security needs of the potential client, then use that information to undercut the RFP bidders. These issues can usually be mitigated through pre-contract due diligence. However once the contract is in place it will take more time and effort to correct errors. Some common pitfalls are: Failure to properly identify all the parties and their relationships. Many clients have multiple locations and separate management of those locations. Security guard services have been hired by the client as a company, when the actual and sole customer was a single location. This is an error on behalf of the client, and having nothing to do with the security guard service. Missing important contractual details. Some contracts indicate that the security guard service agrees to provide personnel "necessary to the best of its ability" unless otherwise mutually agreed. As a general rule, this should be removed from the contract as it dilutes the responsibilities of the company, and avoids liability in the event a site is not staffed. Failure to indemnify insurance requirements. Depending on the location of the work site, liability rules vary as to who is responsible in case of injury or catastrophic events due to negligence. In typical situations, a guard service may be responsible for $1,000,000.00 coverage, however if the insured company is found liable for $10,000,000.00, the guard service may be held accountable. Any gaps in coverage need to be disclosed in the contract. Failure to disclose or understand the implications of arbitration and jury trial clauses. Although arbitration has become generally accepted practice, it has very one-sided implications. If a large consumer base unhappy with the quality of services voluntarily enters into an arbitration agreement, they will relinquish their rights to bring suit in a court.
The Need for Legal Review and Compliance
Important in any contractual agreement, but particularly when services intended to safeguard the security and safety of people and property from loss or harm are involved, is a thorough legal review of the contract. Although that’s not always done and sometimes at the expense of one or more of the parties to the contract, having the contract carefully reviewed by a legal professional is essential.
Why? Because failing to have your security guard contract reviewed by a legal professional can lead to the loss of all of your rights and create liability for you under federal and state laws or your jurisdiction’s laws and regulations governing private security.
Most security guard contracts, for example, won’t comply with all state laws governing security guard services, and may conflict with each other. Each state’s laws and regulations governing private security include detailed requirements for the supervision of security guards, so it’s essential that they be reviewed carefully. If your guard company fails to hire and supervise its guards as that law requires, or you do not require your guard company to do that, or if your contract conflicts with those requirements, the result can be nothing short of catastrophic.
Unfortunately, that’s frequently the case.
More than 40 states and Washington DC for example, require security guards to be licensed and registered, while other states require them to be registered or certified. Some states also require guard company employees to undergo fingerprinting, criminal background checks, drug tests, and bi-annual continuing education. Your guard company must do that in order to stay on the right side of the law and protect your business from liability for actions taken by guards that have not been properly vetted. And it’s essential that your contract require that it be done.
But many guard companies don’t do everything required by the law. If they don’t , that puts you at risk of losing your right to receive services from the guard company, subject you to liability for the guard’s actions, and even make you responsible for damages if the guard’s actions are intentional, reckless, or grossly negligent.
And if your contract conflicts with the law by requiring that your guard company provide services that state law specifically says they’re prohibited from performing, guess what? Just like the contract itself, it’s null and void. So if the guard company disputes your claim that they didn’t provide the services specified in your contract (because they can’t, as it conflicts with the law), you can expect to hear the words "null and void" over and over again.
For these reasons, it’s essential to have your contract reviewed to make sure it complies with the law, is feasible, and will do everything you’re expecting it to do. Having an experienced attorney review the contract can reveal whether revisions are required. And it can also help resolve any conflicts brought to light from reviewing it.
It’s important to remember that the law doesn’t require you to have a written contract before hiring a security guard company or individuals, and there are a variety of contracts available for businesses at the ready. But whether or not your business uses a standard contract or has theirs drafted, it’s essential to have the entire contract reviewed by an attorney who has experience with private security. That way you can be sure it will benefit you and all parties, protect your rights, and enable you to receive the services you’ve contracted to receive from the security guard company you’re hiring to protect you.
Negotiation Strategies for Security Guard Contracts
How the contract is negotiated will also have a major impact on its contents. Some of the most important areas to address during negotiation are:
- Task Requirements: Make sure that the tasks you want security guards to handle are clearly and specifically defined. For example, if you need them to perform regular patrols, verify access credentials, and monitor CCTV systems, make sure those functions are all described in detail.
- Pay Rates: The pay that guards receive will depend in part upon the contract you create. If you are looking for a high-level of service, it may be necessary to pay higher rates than average. However, if you want basic duty-forces with minimal extras, ask for guards at the most competitive industry rates. Keep in mind, however, that even a high-rate for a very low-coverage package may make your security guard contract substantially less competitive. You will need to consider what you expect versus what you think should be reasonable in each situation. Settle upon a fair and mutually beneficial price.
- Hourly Requirements: Determine the number of hours you need every week and the required hours of coverage for each guard. Then be sure that number of hours is stated in the contract, with a method of payment (e.g., weekly or monthly) and specific duration of the contract.
- Future Modifications: Not all future contingencies can be anticipated, so be sure the contract allows for changes if they are mutually agreeable.
Security Guard Contracts: Case Studies
To truly understand the importance of key components in a security guard contract, it is helpful to examine real life scenarios where these provisions have (or lack of, as the case may be) impacted the contracting parties and whether the service, in hindsight, was well or poorly provided.
When Bob purchased his first home in 2015, he was thrilled with the freedom afforded by the purchase but was concerned that neighborhood kids would explore his new home without his permission. He posts a classified ad in his local newspaper seeking a security guard, on a part time basis only, to patrol his property and keep trespassers out. Curtis, a former police officer and K-9 handler, applies for the position. Bob and Curtis negotiate several details of the arrangement, including the times when Curtis will be on the property, how Curtis will interact with others and how Curtis will secure the property in the event that someone tries to enter it. Several months into the contract term, Curtis leaves the screws lying on Bob’s concrete patio, which are then eaten by Bob’s dog, much to Bob’s chagrin and dog’s dismay. Bob serves Curtis with a termination notice, citing failure to suitably perform the duties described in the contract. Curtis testified that the screws — which were described as "lag screws" — were supposed to be left on the patio, as specified by Bob. Because the contract specifically described what was to be left on the patio and what was not to be left on the patio, the court found in favor of Curtis.
Sarah runs a bank, and regularly hires security guards for her evening shifts. Through her many years’ experience, Sarah has developed security guard posts that really work for her needs, and she knows just what she wants. She types out her ideal contract and sends it to Jimmy, a locally-owned, full-service security guard company. Jimmy, who should know better, signs the contract without asking a single question. One month into his service, Jimmy realizes that he is losing money on the contract because it requires him to employ three guards at the bank during busy weekend hours . Jimmy’s regular security guard contracts for commercial businesses include one guard at the bank during these hours and he is losing footing with the other contract customers. Jimmy fires one of the guards at the bank and replaces him with his regular one-guard contract, but Jimmy tries to charge Sarah for the additional guard time after the fact. The court finds that it was Jimmy’s responsibility to communicate with Sarah and advise her of the practical issues with the contract, and that he cannot seek to enforce a contract based on a significant change in circumstances that could have been avoided had he simply asked Sarah if she intended to pay for three guards, rather than one.
Nancy is a lawyer whose first experience with security services began only a few years ago. Her firm regularly uses the security services of its own technology team, which monitors the IT infrastructure remotely and has on-site personnel to respond to IT incidents. Nancy is familiar with the basic components of a security guard contract, and she uses those components when she needs to retain a security guard for her home and family. Nancy realizes, however, that her family’s needs for a security guard differ greatly from her law firm’s needs for security services. Where her firm may require transition language in the case that its IT service contracts expire, Nancy’s home security needs are likely to change very little over time. Nancy is also familiar with audit and insurance requirements for her firm, but she does not impose similar conditions on her home security guard. Nancy discusses these differences with her security guard company, which helps Nancy tweak the contract. On the advice of her own home security guard vendor, Nancy implements a contract that is tailored to her family’s needs, and Nancy teaches her security guard company about the differences in security service contract components between home needs and organizational needs. In turn, the security guard company uses her guidance to better serve its other personal security contracts.