I'm not 100% sure I understand the use case, but here is what I'd try:
Query A: recipients where type = prospect
Query B:
- Targeting dimension: Recipient
- Filtering dimension: Contract
Conditions: contract = (whatever type of contract that you want to exclude)
In both queries, select the "Household Id" as an additional field.
Join the two queries together into an exclusion and make Query A your primary set.
Under the "Exclusion rules for incompatible targeting dimensions", add a new row and choose Query B as your Exclusion set.
Set "Change dimensions" to "Joins" and under Source, choose the Household field from Query B and under Destination, choose the Household field from Query A.
If I understood the use case correctly, I think this will do what you're looking for.