unlocked iPhones

I've seen a few around for $300 -$500.  My phone company says it will
cost me $400 to buy out my current contract to upgrade to an iPhone.

I'm thinking of buying one of these unlocked ones.  Anyone know how to
make sure it work, or if they don't work?

I assume unlocked means I can put it on any phone company and it will work.

Andy H.

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