Cellphone Contracts

In the queried scenario, we understand that there are two separate transactions; one being the sale of a cell phone on credit and the other being hiring the services of the (cell phone) service provider where airtime and data is purchased (in the form of a package) on a monthly basis for a fixed period of time. Both transactions are concluded with the cell phone service provider.

If the price of the phone is included in the contract and the total monthly installments and payment period are fixed then the sale of the phone (with the contract) will be valid and in order. The customer also (at the same time), hires the services of the service provider who provides a fixed amount of airtime and data at a stipulated monthly rate for a fixed period of time. The transaction as described above will be in order and valid.

Generally, service providers discount the price of the phone when one purchases the phone together with an airtime contract. The breakdown of the transaction (which includes the price of the phone as well as the airtime and data package) is generally available and presented to the client when requested; and not left ambiguous.

The customer may also purchase a phone without the airtime package. In this instance the price of the phone is generally higher. In conclusion, both options are available to the consumer and both will be permissible.