Are recorded conversations regarded as legally binding contracts?

Question

Situation: there is a cell phone account in my sister's name. However, she does not use any of the lines, and she does not pay for it (payment comes out of my personal credit card automatically). I was added as an authorized user on the phone account.

I called the phone company to change the address, this is the conversation:

Rep: I need to speak to the account holder to change the address. You are the authorized representative and not authorized to make changes to this account.

Me: fine, how do I change account ownership to me?

Rep: You can go to the store with the account holder, each of you need 2 pieces of ID, then, it will be changed.

Me: I heard from store employees that the change will result in the phone plan price to increase, is that true?

Rep (after a long hold): No, the rates will remain the same after the name change.

Now, I have an app on my phone that automatically records all conversations. Canada is a 1-party-consent state. I, therefore, can legally record a call I am involved in. The representative stating "the price will not change after the account ownership changes" on a phone call I record--does that constitute a verbal contract. That if I were to go to the store and the prices increased after a name change/account transfer, they are in breach of?

Answer 1

You asked the rep about how to change some details on your account, and asked him about the cost. It is clear from the recording that you are not changing anything right now. I can't see anything where you state that you want to enter a contract right now, I can not see anything where the rep indicates they want to enter a contract right now. In other words, no contract has been formed.

The rep did tell you that a name change will not increase the phone plan price. That was a promise. It was a verbal promise, and you have evidence that the promise was made. Your contract will determine whether the company is bound by such a verbal promise.

If you change the name on the contract, with nobody mentioning a price increase, and the price increases, you can surely complain that you were misled and wouldn't have changed the name if you had known about the price increase. However, if you get told that the price will increase before the name change, and you quote the previous promise, I don't think that will force the company to allow a name change without price increase, because your phone conversation didn't create a contract.

Answer 2

Yes, but yours isn't one of those

For the basics of a contract see What is a contract and what is required for them to be valid? Technically, a contract exists independently of its documentation - just like the black eye is evidence of the assault rather than the assault itself, the contract documentation is evidence of the contract, not the contract.

However, your conversation with the rep did not create a contract - neither of you made promises to each other so neither of you is obliged to do anything. No obligations, no contract.

So what was the conversation?

Pre-contractural representations

The rep made a pre-contractual representation. The law surrounding these, at least in australia, is thoroughly examined here. The general principles that would be applicable in canada are that these come in a number of overlapping types:

• Innocent misrepresentation, not made negligently, and not caught by statute.
• Negligent misrepresentation.
• Fraudulent misrepresentation.
• Representation amounting to misleading or deceptive conduct in contravention of statute (“statutory misleading or deceptive conduct” or just “misleading or deceptive conduct”).
• Representation as an element in unconscionability.
• Representation giving rise to an estoppel.

The statement by the rep, if it turns out to be false, is likely to be both innocent and, assuming canada has statutory prohibitions on misleading and deceptive conduct, statutory.

A negligent and, probably, a statutory misrepresentation allow the innocent party to treat the contract as void ab initio* if the misrepresentation induced them to enter the contract and the parties can be restored to their pre-contractual positions.

Signing a contradicting contract

If you go on to enter a contract that directly contradicts the representation, then a court will presume that you were no longer relying on that representation.

However, if the contract is silent regarding the representation and its breach is made evident subsequently, then it can be relied on.

Entire Agreement clauses

Many contracts contain "entire agreement" clauses stating that the written document is the entire agreement. Such clauses break the nexus between the representation and your reliance on it to enter the contract - you are explicitly stating that you didn't.

Answer 3

Are recorded conversations regarded as legally binding contracts?

By default, yes. But check whether the written contract addresses issues of that type, since it would supersede what a representative tells customers in an arguably less formal setting as a phone call.

Absent a clause to that effect in the written contract, your position is twofold meritorious. First, the inconsistent answers you are getting from representatives triggers the doctrine of contra proferentem, which entitles you to the interpretation (or in this case the representative's answer) that favors your position.

Second, the representative's long hold is indicative that he inquired of more knowledgeable personnel about your question and to validate the prior statement you heard from store employees. The representative's long hold evidences that the company knowingly and willfully endorsed the condition of keeping the rates unchanged.

Kudos to you for noticing the long hold. As you can see, that aspect is relevant for ascertaining the company's knowledge and intent at the time it answered your concern. Contract law is premised on that conditions of an agreement or contract be knowingly and willfully entered.