The term pink contract comes from the canned meat for which unsolicited bulk emails (UBE) are named. Most spam is unsolicited commercial email (UCE): bulk email that is offering the recipient a product or service. Other types of spam include email chain letters, personal campaign mailings, messages with virus-laden attachments, phishing attempts and messages containing virus hoaxes, among other possibilities. The defining characteristics of spam are: It’s sent to huge numbers of recipients, and at least some of those recipients have not agreed to receive it.
Some current regulations, such as Canadian anti-spam legislation (CASL), complicate the spam issue by requiring the express consent of recipients. Under CASL, anyone sending commercial messages to Canadian recipients is required to move from the opt-out to the opt-in model, under which recipients agree to receive the messages.
ISPs usually provide customers with a service-level agreement (SLA) that stipulates the rights and constraints under which the service will be provided. Typically, the customer agrees not to send unsolicited mass emails and the ISP stipulates the consequences of breaking that agreement. Although pink contracts are not made public or advertised -- because they would anger customers who wade through equal parts desired and undesired email -- some ISPs offer them upon request.
Although a pink contract is significantly more expensive than the normal, advertised rates for service, it is worth it to spammers. By definition, spam is sent in enormous volumes, which means that even the tiny percentage of responses that spammers get makes the practice lucrative.
One famous example of a pink contract was reported in 2000, between AT&T and Nevada Hosting. Spamhaus, an anti-spam organization, exposed a contract between the two companies permitting Nevada Hosting to send spam while under service with AT&T. AT&T confirmed that the contract existed but shortly thereafter removed Nevada Hosting from their service.