When ISPs advertise “No Contract”, what do they truly mean? [duplicate]

Question

Many ISPs incorrectly advertise that they require "no contract" like CanNet and Coextro below, because undoubtedly customers form a legal contract with the ISP that fulfills these five Necessary Conditions for forming a contract. McKendrick. Contract Law: Text, Cases, and Materials (2020 9 ed). p 17.

A party who wishes to establish that a legally binding contract has been formed between himself and another party must prove a number of matters. The first is that the parties have reached agreement. This is usually done by demonstrating that one party has made an offer that the other has accepted. The rules relating to offer and acceptance are discussed in Chapter 3. Secondly, the agreement must be expressed in a form that is sufficiently certain for the court to be able to enforce. The tests applied by the courts when deciding whether a term has been expressed in a form that is too vague, incomplete, or uncertain to be enforced are

p 18.

discussed in Chapter 4. Thirdly, the agreement must be supported by consideration (although it is possible that effect may be given to a promise that is unsupported by consideration via an estoppel). The doctrine of consideration and the role that estoppel can play in giving effect to promises that are unsupported by consideration are discussed in Chapter 5. Fourthly, the law may only recognize the validity of the agreement if it is entered into in a particular form (such as writing). The significance of requirements of form has diminished in recent years but they have not been entirely abolished. Requirements of form are discussed in Chapter 6. Finally, the parties must have had an intention to create legal relations. This intention is presumed in commercial transactions, but in the case of domestic and social agreements the law initially presumes that the parties did not intend to be legally bound by their agreement. The doctrine of intention to create legal relations is discussed in Chapter 7.

Thus how ought these advertisements be rectified? What's more correct to write than "no contract"?

Answer 1

Thus how ought these advertisements be rectified? What's more correct to write than "no contract"?

Words don't mean the same thing in every context.

In the world of cell phone contracts, the well accepted meaning of "no contract" is that you are getting cell phone service on a month to month basis and may cancel at the end of any given month with no penalty, in contrast to the previous norm in the industry that you needed to continue service for a period of one or more years before you could cancel or you would pay a penalty for discontinuing it early. This usage has spread to Internet service as well.

There is no need to correct or rectify this. Nobody believes that there is no agreement governing the cell phone company-customer relationship. They aren't confused or misled.

McKendrick is simply using a different sense of the word than CanNet.

In the same way, the word "company" can mean a legal entity, but can also mean, the people whom you have with you at a given time, even though they have the same root meaning.

Likewise, sometimes "sex" means "male or female" and sometimes it means something you do for enjoyment and procreation. But people manage to keep the two senses of the word, which are related to each other, straight, even in statutes.

Context prevents confusion. There is no need for words to have only one meaning in all contexts and even within the law, many words mean different things in different situations. This is especially true in common law systems where words are given definitions in a piecemeal case by case manner, rather than due to a single person or committee making a top down decision on what a word's legal meaning should be in all contexts.

Answer 2

When ISPs advertise “No Contract”, what do they truly mean?

Only those companies can determine with certainty what they truly mean. Absent that certainty, suggesting a more correct wording of the[ir] intent entails a bit of speculation and/or consideration of commonplace practices.

In the context of ISPs, the phrase "no contract" most likely means that the customer is not required or expected to retain the services for a minimum of n billing periods (n being grater than 1). Instead, the customer is allowed to end his relation with the provider at the end of the current billing period (or perhaps earlier, if prorating is an option) without being penalized.

That being said, the author's use of "may only" in the fourth item (regarding the validity of the agreement) might create confusion. Some types of contracts are statutorily required to be in a particular form, real estate transactions being one common example. But the author's statement should not be construed as a legal constraint occurring in every type of contract. Some contracts are amenable to multiple alternative forms (in writing, oral, or implied-in-fact), and the law does not prescribe a particular form in which those contracts ought to be entered in order to be cognizable.