A more thorough explanation:

The contract system is a historical practice where prisoners were leased out to private individuals for their labor.

For example, in the United States during the Reconstruction era, many Southern states used the contract system to provide labor for plantations and mines. Prisoners, mostly African Americans, were leased out to private companies who would use their labor for profit. This system was often abused, with prisoners being overworked and underfed, leading to high mortality rates.

The contract system was a way for prisons to make money and for private companies to get cheap labor. However, it was often at the expense of the prisoners' well-being and human rights.