From a business standpoint, I can understand contracts. I don't care for them personally, but if there are expenses, such as rent, utilities, or payroll...it seems sensible to offer short term contracts to individuals especially when there are incentives to do so.
It's not my cup of tea. Been training for 4 years now without any formal contract. Although, I once suggested to my teacher that I might move on...and he point blank replied, 'You can quit when you replace yourself.' Some contracts don't have an expiration date.