Will factory unlocking my iPhone break its contract with my service provider?

I bought the iPhone 5 for $199.It's on contract, so it's not only locked to AT&T for two years, but I'm required to pay monthly for the use of this phone for two years. I'm interested in buying the factory unlock on ebay, but I want to know if the contract is going to break with AT&T.

Not if you keep using the one on contract

You clearly don't understand what a contract is.

You bought your phone at a huge discount in return for agreeing to make payments for a minimum of two years. Whatever phone you now wish to use with your present network you are still going to have to pay for your original contract until it ends.

If you don't, then expect debt recovery action and a ruined credit rating.

BTW: you can't "factory unlock" your phone. It's either manufactured as an unlocked phone to begin with or is provided with a carrier lock which may later be removed.

No, factory unlocking the iPhone will not break the contract. You are still obligated to pay until the end of the contract. The only way out of that is if your carrier has an ETF (Early termination Fee).In this case you can pay the early termination fee and then be out of your contract. Also, factory unlocking with ebay can be risky… You may get it for a good price, but if anything goes wrong, good luck getting support (I have dealt with my share of them).

No. That phone will have nothing to do with AT&T so it will not affect the contract whatsoever.