As already explained above, you can sell a phone under contract when you still owe money on it, due to the line of unsecured credit being extended to you.
For those who’ve paid off their phone, canceling at this stage is in your advantage. Should you want to end the contract, you won’t be leveled with an early termination fee. If the phone isn’t yet paid off, you will face a fee in varying degrees based on how much you currently owe.
If you still owe money on the phone, selling it while it’s still under contract essentially kills two birds with one stone. With the money you receive from the sale, you can pay off the remaining balance. At the same time, this move allows you to cancel your contract, helping avoid the early termination fee. Not paying off the phone after selling it to a new owner causes the carrier to blacklist the device, thus keeping it blocked and prevents it from being used.
As a third strategy to get out of your contract, consider transferring the phone to a new owner, who will resume responsibility for the device, including any payments and termination fees.