Okay I am new here and I think I have probably a stupid question...but here goes -

I have been a customer of AT&T since 2007. My husband and I have upgraded our phones each time we have been able to and have enjoyed the service. A few times I've had to have my phone replaced either through insurance or warranty.

Recently my Samsung Eternity's mic stopped working and I was sent out a brand new Samsung Mythic to replace it. I used the Mythic for about 20 days and I noticed during that time that it wasn't working properly - it would freeze up on me and the only way to clear it was to pull the battery, I also couldn't get it to sync with my bluetooth speaker phone. So I contacted AT&T who sent me a new phone the next day. Instead of opening the phone I decided to sell it on ebay and replace my phone with the iPhone (which my husband has and loves). I found out that I can upgrade to the iPhone on the 9th of October.

Could I get in trouble for selling my phone before the upgrade? AT&T can't charge me for the phone since it was a honest issue with my phone and I did pay the deductible, right?
Also, someone asked me if the phone is in "contract". What do they mean by that? I have no idea - like would my name be attached to that phone even though my SIMS card isn't in it?
I am so confused by all of this!