While the vast majority of the links to Spoons’s entry on U.S. Cellular are sympathetic to his position, the Peoria Pundit takes the position that U.S. Cellular’s $220 bill, while unreasonable, is legal nevertheless. A few of Spoons’s commenters have taken similar positions, most of which boil down to the argument their “customer service representative” offered Spoons: “a contract is a contract.”

Of course, all lawyers and most non-lawyers know that a contract isn’t always a contract. To cite the most obvious example, a hit man who breaches his contract on a prospective victim has plenty to fear from the Mafia don who offered him the contract, but only because the don has his own way of enforcing “contracts” like that one. If the don were stupid enough to sue him for damages in any court of law, the hit man would have a pretty obvious defense: murder is illegal, and he can’t perform on the contract without committing a murder, therefore, the contract itself is illegal and unenforceable.

Looking on the bright side, Spoons’s contract with U.S. Cellular did not require Spoonsy to kill anybody. However, it may be legally objectionable on other grounds. The following is a list of potential defects involving U.S. Cellular’s $150 termination fee, as applied to Spoons. [Note to U.S. Cellular's lawyers^*: I'm not stating as fact that Spoons's allegations are factually correct. I think they probably are, but apart from knowing Spoons reasonably well online and having no reason to question his veracity, I have no personal, independent knowledge of the specific claims here, nor do I claim to.]

1. No Breach. Spoons no longer has a copy of the contract he allegedly signed, but in all likelihood, he didn’t actually do anything the contract expressly prohibited him from doing. He didn’t terminate his service or stop paying his bills until after the full contract period of two years had run. All he did was begin a new line of service with another carrier, which he had every right to do. The current agreement provides that “[a] request to port your number will be a request by you to terminate Service.” I seriously doubt that the 2002 version of that contract did, as number porting was not an option back then.
2. Ambiguous Term. U.S. Cellular takes the position that porting a number to another carrier implicitly breaches the contract by rendering the old account “inactive.” Presumably, the missing contract does contain a term regarding the subscriber’s duty to keep the contract “active.” However, given the fact that cellular providers successfully thwarted number portability for as long as they did, it’s highly doubtful that the contract specifically stated that porting a number to another carrier renders an account “inactive.” Indeed, the more reasonable assumption is that porting a number to another carrier will cause the original carrier to assign a new number in its place, as it would do routinely in the event that a customer calls to request a new number. It is well-established legal doctrine [whose name escapes me at the moment] that a vague or ambiguous contractual term in a contract of adhesion (i.e., any contract offered on a “take it or leave it” basis with no opportunity for negotiating the terms) will be construed against the party who drafted the contract. NOTE: this theory does not work under the current version of their contract, which explicitly defines porting the number as a termination.
3. Substantial Compliance.1 Even if Spoons technically breached the agreement (which, in light of above two issues, he probably didn’t), he didn’t breach it materially, as he substantially complied with the contract by offering to pay the bill that would normally be due under the balance of the contract. By analogy, a tenant in a one-year lease can move out any time he wants without breaking his lease. He’ll just has to pay his rent for the rest of the year (maybe).
4. Opportunity to Cure. Even if Spoons did commit a material breach, U.S. Cellular failed to offer him a reasonable opportunity to cure that breach. If U.S. Cellular really did believe it was harmed by a customer transferring his number away during a regular contract period, they should have notified him of this position as soon as they learned he was attempting to do this, i.e., as soon as Sprint contacted them to requesting the transfer, and allowed him a reasonable opportunity to cancel his transaction with Sprint.
5. Unconscionability. Even if the contract was written in such a manner as to defeat all of the above objections, by making it a material breach to port your number to a new carrier even for five minutes without an opportunity to cure, that requirement is unreasonable, oppressive and unconscionable. U.S. Cellular’s only legitimate interest is in collecting its fees, not in the protracted hoarding of a phone number that rightfully belongs to Spoons and not to them.
6. Penalties. Even if it were reasonable to impose a contract termination fee merely for transfering a number rather than cancelling one’s service, the consumer should still have the choice between paying the early termination fee and paying the amount that would be due under the contract if the service had continued. A consumer who cancels after three months of service would probably prefer to pay the $150 termination fee than pay the monthly rate due for the remaining 21 months; that’s what the fee is there for. But a consumer who, like Spoons, cancels late in the game would opt to pay out the balance of the contract, instead. Refusing to give the consumer that choice makes the termination fee look more like a penalty than a legitimate liquidated damages clause, which would have to be a reasonable estimate of U.S. Cellular’s damages, not an arbitrary amount U.S. Cellular would like to collect because … well, just because.
7. Penalties, Part Deux. Sometimes, a lawful liquidated damages provision will have effects that appear unreasonable under certain circumstances, but were reasonable estiumates based on what was known at the time the contract was drafted. That defense probably doesn’t apply here. While U.S. Cellular had no way of knowing in advance when or if Spoons would cancel his service (and therefore, no way of knowing whether they’d be undercompensated or overcompensated by a $150 fee), it was surely foreseeable that some consumers would terminate late enough in the game to make the $150 termination fee unreasonable as to them. Nevertheless, even if they service that challenge, the $150 can only be reasonable as a substitute for the money that would otherwise be payable under the balance of the contract. It can never be reasonable when charged on top of the contractual fees, as U.S. Cellular has done in this instance. By charging Spoons $220, they have effectively claimed that he owes them $150 for terminating his contract early, and he owes them an additional $70 for not terminating it early. They can’t have it both ways.

Any one of these seven theories would be enough to at least partly vindicate Spoons’s legal position, and all but #7 would vindicate him entirely. My challenge to anyone who thinks U.S. Cellular’s position is legally justifiable is to show why all seven theories are wrong. My challenge to everyone else is to identify any other theories I may have overlooked, in which case I will update the above list accordingly. One possibility is that the federal law that now guarantees number portability also prohibits carriers from penalizing consumers for exercising that right. I haven’t put that one on the list yet because I don’t know enough about that law to know if it’s true. Perhaps you do?

^*This disclaimer was originally directed to “U.S. Cellular’s idiot lawyers.” Upon further reflection, it occurred to me that for all I know, the idiots Spoons spoke to may acting out on their own, and not in accordance with any formal company policy that was approved by its legal department. If, however, U.S. Cellular’s lawyers have actually blessed this policy, then the original statement stands.

UPDATE: The knuckleheads who jumped to U.S. Cellular’s defense (mostly commenters to Spoons’s site) will be delighted to know that their quaint little theory about contract law is so little and so quaint that it isn’t shared by anyone, including U.S. Cellular itself. To its credit, U.S. Cellular, unlike the knucklehead commenters, has acknowledged its error and removed the early termination fee from Spoons’s bill. Thanks to Paul of Wizbang for his assistance.