There are a lot of schools and organizations that have used contracts unethically to their advantage. But for the most part a contract isn't a bad thing. Most of our every day services are contractually based. Your mortgage/rent, automobile, credit cards, phone, cable t.v/satellite/internet, gym, school/student loans, etc. are all contracts. So why is signing a contract for martial arts training so taboo?
The reason instructors started turning their school's into a business is because back in the 80's instructors were struggling between teaching, job, family and all the financial burden that comes with it. They were ending up divorced, and bankrupt. The students would become successful in life because of the morals, values, discipline and work ethics instilled into him/her while the instructor slept on a cot in the backroom of his school. Most of us (myself included) have at some point in their training had a fantastic instructor who didn't know how to run a business and eventually closed their doors and moved on with life.