There should be some privacy involved. I can see where the parent is coming from, but growing up, many of friends who became "rebellious" were the ones with overbearing parents. Privacy would allow him to go out, make some mistakes sure, but hopefully learn from them. That in and of itself is more valuable than the phone, and the rules with nothing in it for the kid doesn't seem realistic. Yes, there's the phone, but that's then contradicted by her saying that she paid for it, it's hers and she's loaning it to him.
a) kid's 13. Let's not forget that. No 13-year-old should have a cell phone, in my opinion, but that's separate. b) he's not paying for it. It's pretty cut and dry to me; if the kid pays for his cell phone, the parents lose all ability to regulate how he uses it. If the parents pay for his cell phone, the kid loses all ability to regulate how he uses it. (I agree about the rebellious kid point, but put that aside as a reason for a moment.)
That's a very capitalist way of looking at it, and if the kid has that understanding of the right to privacy, that's fine. Personally, I think that if someone thinks that something should be private and I don't have pressing and/or reasonable evidence that it should not be, then no matter who owns the medium, they should get some modicum of privacy. Granted, there's a lotta wiggle room in that sentence! And I would just like to emphasize that I'm a Non-parent. So obviously I'd argue the kid's side. It's the only side I've been on!
I've always found it abhorrent that children don't have any assumed right to privacy. Having a private life is kind of necessary to maintain your sanity. But adults are always the ones who make the rules, and so long as they don't have any kind of respect for minors the situation stays the same. No one chooses to be a child. Parents, however, often choose to be parents, but then they have the assumed right of dictating the life of their child. For those who have good parents, its not an issue. For those who don't, its like being born into prison for 18 years. Think on this: A child is the only person whom you can legally hit maliciously.
I'm also a non-parent, thank god. But I would jump to the parents' side here (except the dumb blogging about it part...) because I've dealt with a lot of irresponsible kids. I think the lesson the kid will take from it is get a job as soon as physically possible (14 in the States, or earlier with hardship proof, I think) and escape the shackles he's been placed under. This makes sense to me, and I think it's a great way to parent. In her place, I probably wouldn't have written a contract; I would have discussed this with my kid and then trusted him to follow through. Getting his signature was a needlessly dramatic move.and if the kid has that understanding of the right to privacy, that's fine.
If he doesn't he'll learn it from this, yeah? Most kids learn about privacy most directly through internet and cell phone use these days, I think.