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Someone I knew was with Fido, had a really good plan but was from years ago and Fido didn't let him renew that same plan. They made him get one of their expensive plans and he went and with WIND.
I thought if you don't renew your plan you just keep paying for what you had before on a monthly basis. You just can't get a new phone with your carrier that is at a subsidized price.
They have rules on which plan you can have and subsidize.
My plan for example was $20 below their 'minimum' a month. Required a $70+ plan to get a subsidized phone with rogers. I haggled and got my phone anyways.
The contract is just so you fuffill your term so they can retain your business for that given time and they regain their costs from the phone and earn from you being on their network.
Basically you just can't leave before its up for free and after its up you shouldn't need to worry at all.