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I'm currently under 2year contract and had a chance to get a new phone from my friend.
However, since I'm under 2 year contract, how can I activate the new phone and deactivate the old phone without breaking the warranty?
You can just call and they can put the new phone on the line. The old phone would be able to be sold. I'm not sure what you mean by "breaking the warranty". I don't believe warranties will transfer from the original owner, altho I could be wrong.
Your contract is on the service, not the device. Swapping devices has no effect on the warranty.
Which carrier are you with? Your post does not indicate the carrier nor does your profile. If you have a CDMA carrier you can call or sometimes perform the swap via the carrier's web site. For GSM devices you just move the SIM.