There are two types of contracts you can sign your players to. A "Professional" contract means the player is playing at the NHL level. These contracts are more flexible. You can waive or release players signed to a professional contract.
A "Minor League" contract is used to sign a player to your minor league system. This contract is typically less expensive, but you cannot waive or release anyone signed to this contract.
When joining a SimLeague, you will draft a team of 23 players with professional contracts and will be assigned six players with minor league contracts.
In Dynasty SimLeagues, if a player signed to a minor league contract plays 20 or more games in the NHL level in one season, he will automatically be signed to a professional contract for the following year.