Can i use a pay as you go sim in an unlocked iphone 5 that is currently under contract

If it is under contract it will be locked to the carrier who sold it

I doubt that it has been unlocked by that carrier which is the only way to unlock an iPhone for use with any carrier

save your money and avoid the grief

Not only would it be locked if under contract, but if that is not your contract, then the previous owner may have defaulted on their contract. In that case, the phone may also be blacklisted by the carrier and useless. And even if not, the carrier it is locked to is not going to unlock it until the contract terms have been met by the previous owner.

xxJO32013xx wrote:

Is it possible that the previous owner used some sort of hack to unlock it

Yup, and given all you have said, I'd count on it. I know of NO provider that will unlock a phone that is still under contract - none will do that. You must either finish the contract, or pay out the early termination fee before they will unlock.

Second, there is no online site that you can reliably check the lock status. Only Apple actually knows which devices in its database are unlocked, and they do NOT make that data available to public web sites.

I would not touch that deal with a 50 foot pole.

In addition to everything you have been told already, the probability is close to 100% that the phone was stolen. If it was there you will not be able to activate it on any network anywhere in the world, as Apple's antitheft Activation Lock feature will prevent its being activated. And owning any stolen property is a crime in itself.