We don't have contracts at my school, you either pay up front for one month, or for three months (at a slight discount). We actually use the "we don't have contracts" bit as part of our sales pitch. However, I'm just trying to play devils advocate and show how a contract can be a good thing if not abused by both parties. And that a contract in and of itself, does not indicate a "mcdojo" as it could be nothing more than the owner of the school not wanting to deal with having to write out bills each month. We went to the three month option because it took my instructor so much time to write out the bills and keep track of who's paid, etc. Having just a few people not pay, for whatever reason, can add up quickly and seriously affect the owners ability to pay the bills.