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Cellular Phone Forum / Providers / ATT Wireless / April 2004

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COntract void on merger?

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Andy M --Tampa Bay-- - 30 Mar 2004 20:45 GMT
A friend on ATTWS wants to switch to either T-Mobile or Verizon. But good
ol' ATTWS gave him a sweet deal and he's taking it. He says that his
contract will be void once the merger is complete so then he won't have to
pay ETF, the phone (NEC 525) will be his, so he can unlock and flog it on
Ebay.

Is it true that the merger will void contracts? Some news sources say ATTWS
will exist as a legal entity so contracts are not cancelled. I'm confused.
What's true and what's not? Would appreciate advice.

Andy M - Tampa Bay
"Too much information is Misinformation"
Robert M. - 30 Mar 2004 21:40 GMT
> Is it true that the merger will void contracts?

No. No such luck.

read the fine print in your AT&T Wireless Welcome Guide

and this puffery:

Dear AT&T Wireless Customer,    
As you may have heard in the news, Cingular Wireless has announced an
agreement to  acquire AT&T Wireless.  We?re very excited about what this
could mean to our  customers, and I wanted to take a moment to let you
know how you could benefit.    The combination of AT&T Wireless and
Cingular Wireless should create a stronger,  larger wireless company and
service network ? the largest in America.  As a customer,  this could
significantly improve your wireless experience in many ways.    Wider
coverage, better reliability, higher quality ? Together, our voice and
data  network could deliver coverage in more states and increase
capacity to handle  your calls.  That means fewer dropped calls, and
better voice quality.    More choices ? A variety of service plans and
state-of-the-art handsets will fit  your individual lifestyle at
competitive prices and terrific value.    More services ? A strong
network foundation should help accelerate the rollout of  even more
enhanced capabilities and true wireless broadband service across  
America and around the world.    In short, the customer will be the
winner. We appreciate your business now and hope  you will be a customer
for years to come.    
Sincerely,      
John D. Zeglis  Chairman and CEO
BruceR - 30 Mar 2004 21:47 GMT
Your friend is, to politely put it, misinformed.  Contracts are not
nullified as the result of a merger or aquisition. There is generally an
assignment clause in any contract that might read "ATTWS, its assigns
and successors..." but even if it's not there, the fact that Cingular
owns (it's NOT a merger)ATTWS is merely a change of ownership from one
shareholder group to another.  Even if they dissolved ATTWS (which they
won't do if it would cancel contracts) the contractual relationships
would likely survive.
You'll note that owners of Chrysler cars who financed their purchase
through Chrysler credit still had to make their payments after Daimler
bought or merged with the company.

From:Andy M --Tampa Bay--
nospamandym@yahoo.com

> A friend on ATTWS wants to switch to either T-Mobile or Verizon. But
> good ol' ATTWS gave him a sweet deal and he's taking it. He says that
[quoted text clipped - 8 lines]
> Andy M - Tampa Bay
> "Too much information is Misinformation"
John S. - 30 Mar 2004 22:19 GMT
>Is it true that the merger will void contracts?

Your freind needs to re-read his contract. Someplace in there there are words
that mean - We can sell this contract and it will remain in force to all heirs
and assigns.

Basically the merger will NOT void any contract and if your freind believes
that he needs a reality check.

--
John S.
e-mail responses to - john at kiana dot net
Todd Allcock - 31 Mar 2004 01:34 GMT
> He says that his
> contract will be void once the merger is complete so then he won't have to
> pay ETF

He's not a law-school student, I'm guessing...

> Is it true that the merger will void contracts? Some news sources say ATTWS
> will exist as a legal entity so contracts are not cancelled. I'm confused.

It doesn't matter if ATTWS exists after the merger or not if the
contract addresses that possibilty.  While I don't have an AT&T
contract, my last Cingular one clearly states I'm under contract with
Cingular "and it's heirs and assigns", meaning anybody they want to
sell/give my contract to.

> What's true and what's not? Would appreciate advice.

Cingular may actually let your friend out if THEY choose to, usually
because of a "material change of terms", say, if your buddy is getting
some far-out deal from AT&T that the new regime chooses not to honor.

But if Cingular continues his rate plan and coverage area with the
same terms as AT&T, (and they will!) then your buddy will be "sold" to
Cingular, just as a pro ball player can be sold from one team to
another as long as his contract terms don't change.

When I was a Cingular dealer several years ago, Cingular bought out a
small rural carrier in Missouri.  They chose not to continue a
particular "one state, one rate" plan that carrier offered at the time
(IIRC, it used Verizon as a roam partner, and Cingular and Verizon
didn't get along so well!) so Cingular simply cancelled the plan, and
told the affected customers they could select a different plan or get
out of their contract without penalty.  (This example was from the
"old days" before nationwide roaming was common.  I really doubt AT&T
is offering your buddy anything Cingular would deem so costly they'd
rather give him an out than simply let him keep it until his
expiration date!)
Paul - 31 Mar 2004 14:57 GMT
Though he's probably going around telling everyone his wishful
thinking, while claiming to be a law school graduate.....

Amazes me how folks try to repeat a lie so many times, it becomes the
truth, at least in their own minds.

>> He says that his
>> contract will be void once the merger is complete so then he won't have to
[quoted text clipped - 33 lines]
>rather give him an out than simply let him keep it until his
>expiration date!)
Andy M --Tampa Bay-- - 31 Mar 2004 17:19 GMT
>> Though he's probably going around telling everyone his wishful
>> thinking, while claiming to be a law school graduate.....
>>
>> Amazes me how folks try to repeat a lie so many times, it becomes the
>> truth, at least in their own minds.

the friend got his mis-info from some web forums probably... those
rumor-spreading sites...

>> On 30 Mar 2004 16:34:36 -0800, elecconnec@aol.com (Todd Allcock)
>> wrote:
[quoted text clipped - 46 lines]
>>> rather give him an out than simply let him keep it until his
>>> expiration date!)
ben skversky - 01 Apr 2004 17:02 GMT
He better read up on contract law. How does he figure his contract will be
voided?

> A friend on ATTWS wants to switch to either T-Mobile or Verizon. But good
> ol' ATTWS gave him a sweet deal and he's taking it. He says that his
[quoted text clipped - 8 lines]
> Andy M - Tampa Bay
> "Too much information is Misinformation"
 
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