Get Out of Your Cell Phone Contract Early with Materially Adverse Changes

Photo: JD the Photog

While it's difficult to get out of a cell phone contract early without paying an early termination fee, there are a couple of loopholes.

Take Sprint’s contract language, for example:

When You Don't Have To Pay An Early Termination Fee
You aren't responsible for paying an Early Termination Fee when terminating Services: (a) provided on a month-to-month basis; (b) consistent with our published trial period return policy; or (c) in response to a materially adverse change we make to the Agreement as described directly below.

Our Right To Change The Agreement; Your Related Rights
We may change any part of the Agreement at any time, including, but not limited to, rates, charges, how we calculate charges, or your terms of Service. We will provide you notice of material changes—and may provide you notice of non-material changes—in a manner consistent with this Agreement (see "Providing Notice To Each Other Under The Agreement" section). If a change we make to the Agreement is material and has a material adverse effect on Services under your Term Commitment, you may terminate each line of Service materially affected without incurring an Early Termination Fee only if you: (a) call us within 30 days after the effective date of the change; and (b) specifically advise us that you wish to cancel Services because of a material change to the Agreement that we have made. If you do not cancel Service within 30 days of the change, an Early Termination Fee will apply if you terminate Services before the end of any applicable Term Commitment.

Currently, Sprint customers have an opportunity to exit their contracts for this very reason. If your August statement describes an increased administrative charge that goes into effect on 9/9/11 and a change in terms and conditions, you can contact Sprint within 30 days of receiving this notice and use the materially adverse change clause to get out of your contract.


If the materially adverse change argument doesn’t work, you could try arguing that the company has fallen short of its customer guarantee, if it has one. The customer guarantee has significantly less legal strength than the terms of your contract, however.

Also, remember that any time you don’t get what you want from a customer service representative, you can try calling back and talking to a different person. You may eventually have a breakthrough.

One problem with this strategy is that you have to wait for your cell phone service provider to actually make a materially adverse change to their contract, which may not happen as quickly as you need it to. The Consumerist provides ongoing coverage of such changes, so visit the site regularly if you’re looking for a possible way out of your contract.

1 comment:

Anonymous said...

I actaully called Sprint today to cancel under these pretenses and they said, "In your contract, which you signed back in 2009, it said that we could charge you up to $1.99 in Administrative Charges before it is considered a 'material change.'" They refused to mail me a copy and referred me to the Sprint store where I first obtained service. She said the store would be able to print out my contract. We'll see...