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Victoria Pynchon

I mediate and arbitrate complex commercial disputes, the former with ADR Services, Inc. in Century City and the latter with...

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The 33 cent wage and income gap is unacceptable and unnecessary. So is the cliché glass ceiling. Bottom line, our...

Taking Charge of Your Consumer Contracts: Cell Phone Arbitration Agreements

A reader's inquiry (does the Sprint cellphone contract contain an arbitration clause?) alerted me to cell phone company "escape" clauses courtesy of the Consumerist Blog's post Materially Adverse Clauses for All Major Cellphones-So You Can Escape a Contract without a Termination Fee.

THE ANSWER TO THE QUESTION IS:  YES.  SEE NEXT POST FOR DETAILS

This is consumer reporting at its finest.  The "little guy" has been fighting (and sometimes winning) the battle of the adhesion consumer contract for years (see the Wage Law Blog's coverage of the California Supreme Court's decision in Discover Bank).

(For non-lawyers, an "adhesion" contract is one you didn't really agree to because, for instance, it came as an insert with your monthly cell-phone or credit card bill or appears on the back of the ticket you pull when you enter your local mall's parking lot.  It's an asymmetrical contract.  The party imposing the agreement on you has all of the power and you have none.  Take it or leave it.  That's an adhesion contract and it's not necessarily -- in fact is often not -- invalid).

That said, it appears that most cell phone contracts contain a clause permitting you to terminate your service before the expiration date without a cancellation fee (a real boon if you want to change plans!)

You may generally do so "in response to a materially adverse change [the cell phone company] makes to the Agreement . . . (Sprint Contract language).  The imposition of an arbitration provision that wasn't part of the contract when you sign it would be a material adverse change (I'm actually willing to go out on a limb here and say that's my actual legal opinion).

The Consumerist has collected all of the cell phone service providers "materially adverse change" contractual provisions here.

Sprint requires you to provide it with notice of cancellation within thirty days of their notice to you of the change (as I suspect all the other cell phone services do).  So if you want to take advantage of this, you'd have to begin reading those inserts that come with your cell phone and credit card bills. 

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