How early termination charges are calculated, the rules they must follow — and the situations where you owe nothing at all.
If you cancel a phone contract early without legal grounds, the provider will bill an early termination charge — typically the remaining monthly charges for your minimum term, sometimes with a stated reduction. An early termination charge is a fee for leaving during the minimum term, and it must have been clearly disclosed when you signed. But two things matter more than the headline figure: Ofcom has fined major providers millions of pounds for overcharging leavers, so the first figure quoted is not always the right one — and if one of the legal exit routes applies to you, the answer may be nothing.
An early termination charge isn’t a free-for-all. The charge and how it’s calculated must have been clearly disclosed upfront — buried or surprise exit fees are challengeable — and Ofcom has taken enforcement action worth millions of pounds against major providers that overcharged customers on exit. Always ask for the calculation in writing and check it against the contract you actually signed.
One honesty note for businesses: you may have read that an exit fee “can’t be more than the payments you had left.” That protection comes from consumer law — a business, even a very small one, can’t rely on it. For a business, the formula that counts is the one in the signed terms — which is why getting the paperwork in front of someone who reads it line by line matters so much.
Before accepting any figure, check whether a fee-free route applies:
The routes are covered in working detail in Can you cancel a business phone contract? and how to leave without paying a fee.
Generally yes — if it was clearly disclosed upfront and calculated as the contract says. But chargeable doesn’t mean correct: regulators have caught major providers overcharging leavers at scale, so verify before you pay.
Business contracts are often drafted exactly that way, and the consumer-style cap doesn’t protect a business. What you can do is hold them to their own signed formula — and check whether a fee-free exit route makes the whole question moot.
Maybe not. Serious, persistent service failure can give you grounds to end the contract for breach — owing nothing — but that route runs on evidence and needs your own solicitor’s confirmation before you act.
Every claim above is drawn from the sources below, checked against the current published version.
Last verified 30 July 2026 · General information, not legal advice — your own solicitor should confirm how the rules apply to your contract.
