can u pls describe what are contracts?

As i dont know much abt contract phones, can u pls describe contracts for apple iphone5 16 gb?


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    iPhone 5: 16 GB

    Unlocked (No contract with Service) : $649
    With 2 year contract: $199

    Basically, you have two options for your carrier. If you pay $199 you have to use it for 2 years. The only way you can upgrade in the middle of two years is paying the full price of a phone. Option 2, you pay $649 up front to your carrier and you can leave that carrier anytime with no penalty/termination fee, switch phones whenever (unless you decide to sign a contract later), and cancel your plan anytime.

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