What contracts are you talking about? The club's contract with the league regarding profit distribution? The players contracts with the clubs?
If you mean player contracts the answer is, not necessarily. The player's contract is with the club not the Premier League. It depends on the terms in the player's contract.
Some players have terms inserted in their clauses whereby the club cannot cut the player's salary significantly or at all in the event that it gets relegated. In which case it becomes economically unsustainable for the club to keep the said player on its books while playing in the championship which is a level below and has lower profit margins etc.
Also for the same reason the club may have to sell some of its better players off if it gets relegated just to balance its books because it won't be making as much money in the Championship. The TV Revenue is lower, the sponsorships are lower, attendances are lower and so on.
Some players have release and/or buyout clauses set into their contracts. Whereby the club is bound by the contract to accept any offers that come for the player if they get relegated.
There can be other factors that I can't think of. But it depends on the player's contract and how he (his agent) negotiated it. Hope this helped.
This post was edited on 4/28 at 5:26 pm