Sorry, But the Iphone is ONLY available with a contract, That is the agreement between ATT and Apple. About avoiding the contract, I will consult my Supervisor at work about that. I am a CSR for ATT.
Edit: This is directly from ATT...
No commitment service agreements
Option in which customers pay full price for their equipment or activate service with their own equipment.
The customer will still accept the Terms and Conditions. These terms review the agreement between AT&T and the customer, including the customer's price plan, terms of payment for service, and any additional services, as well as the terms and conditions of service.