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Pearl is that you have a spot, which you likely wouldn't otherwise get (if you're going down this pathway).Pearls and pitfalls? What happens to the contract if one doesn't fulfill 2cs/pathways on time?
Pitfall is that a program that is going down this pathway is probably not going to be the most pleasant place to work and unlikely to get you in position for a competitive fellowship if that is your goal.
As for your 2nd question, contracts are contracts. You have to fulfill your end just as the program has to fulfill theirs. If you don't fulfill you end, your contract can be terminated.