Cell Phone Companies in Legal Battles Over Contracts

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Cell Phone Contracts In the present day, most people have cell phones. It is also true that most people have a negative experience with a cell phone company imposing early termination fees. When people activate their cell service, they are forces to enter a binding contract for one to two years. If the customer agrees to the contract they will be obligated to pay the whole contract term or they will be assessed the early termination fee. However, the days of cell phone contracts early termination fees are beginning to change. Contract “A contract is a legally enforceable promise.” Lau, T., & Johnson, L. (2013). When people buy cell phones these days, they understand that they will be entering a legally enforceable promise. Nevertheless, the customer expects that the service that the company provides is adequate and up to the customers standards service in return. This is the reason some of the cell companies have been in legal battles over their cell contracts. T-Mobile Class Action Suit A few years past, T-Mobile held customers to a flat rate fee of 200 dollars whether or not the customer was in the beginning of the contract or nearing the end. The company tried to settle this disagreement with customers in arbitration. However, a California court found that the agreement was unconscionable and unenforceable. “The lawsuit also argues that the flat fee for early termination constituted "an unlawful penalty under Civil Code section 1671, subdivision (d), is unlawful under the unfair competition law and is unconscionable under the Consumers Legal Remedies Act.” (Turner, 2007) Results of the T-Mobile Lawsuit With the Judge finding what T- Mobile did was unlawful, the ruling sets precedence. The precedence allows other people ... ... middle of paper ... ...t. However, if no good faith gestures are given back to the customer the company may very well be hurting the company in the end. Competition in this industry is fierce, and without contracts holding customers hostage the cell phone industry is in for unprecedented changes. References Lau, T., & Johnson, L. (2013). The legal and ethical environment of business. Irvington, NY: Flat World Knowledge, Inc. DOI: www.flatworldstudents.com Turner, H. (2007, July 12). Lawsuit against t-mobile's early termination fee gets go-ahead. Retrieved from http://www.lawyersandsettlements.com/features/cell_phone_early_termination_fees/tmobile-fees.html Dolcourt, J. (2013, November 13). Why the us is poised for off-contract shift (Smartphone’s unlocked). Retrieved from http://reviews.cnet.com/8301-6452_7-57612191/why-the-us-is-poised-for-off-contract-shift-smartphones-unlocked/

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