Imperial colonists in Morrowind are not permitted to own slaves. But indentured servants are allowed. Some less scrupulous colonists exploit this loophole by buying a slave’s freedom only to keep them in indentured servitude until their debt is repaid.1
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Well, with cats and dogs being so scarce in this region of Tamriel, something else came to mind. Did you know that some Telvanni actually keep Khajiit slaves to catch rats and other vermin? They’re natural hunters. And a side benefit is that they can feed them less. Now, being an Imperial colonist, I am not legally allowed to own a slave, but indentured servitude is common and perfectly legal in the empire. It just so happens that there’s a candidate nearby. A Khajiit slave imprisoned in Tel Vos.
— Burcanius Varo (dialogue)1