On Ebay, these carrier specific iPhones did their contract expire?

I'm not from the US and is a bit lost.

On Ebay you can find "AT&T, Verizon, Sprint" etc iPhones. How did they get like that? Did the owner purchase it on contract for $199 for example, and has now switched their phone on the same contract and is selling the old iPhone?

I dont know how this works.

HELP?

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