That's pretty interesting. I always assumed that each contestant was paid to be in the Big Brother house, glad to see that I was right if this information is correct.
The contract itself reminds me of one of the things that I hate about reality television in general. The people who go on reality television and then complain about how they didn't know what they were getting in to. More than likely, if you are signing up to be a contestant on a reality show, you have watched the show before and have a reasonable idea of what to expect. If you go on Big Brother, you should expect to be locked in a house full of people who want to win the prize as much as you do. If you go on the Bachelor/Bachelorette you should expect to compete with other people for the "affection" of someone else. If you go on the Real World/Road Rules Challenges, you should expect to be force fed alcohol and get placed into volatile situations designed to make people get into fights. If you don't watch the show and sign up because you want to get your 15 minutes of fame, you're still getting exactly what you asked for and I actually feel slightly less bad for you than I would if you actually watched the show previously.
Hell, if the application for Big Brother alone is any indication you should know exactly what you are getting involved in. Its a damn book and asks you tons of questions ranging from "What is your relationship with your parents like" to "Are you comfortable having intimate details about you made public?"