Charter schools are, by definition, contract schools. Charter means contract. To understand this fundamental feature of charter schools and the limits that stem from this aspect, this paper analyzes the topic of contracts and what contracting means for coming to terms with charter schools. This analysis locates charter schools in the realm of the market (i.e., the private sector) and helps us appreciate the nonpublic, privatized nature of nonprofit and for-profit charter schools. From this perspective, typical statements such as "there are some "good" charter schools out there" or "what can be done to improve charter schools?" become superfluous. The main question becomes: are privatized, contractual, marketized education arrangements consistent with the requirements of democracy and a modern society, or do we need a government that takes up its social responsibility to ensure a fully funded, high quality, free public education system open to all?