diff --git a/apps/api/plane/license/api/views/admin.py b/apps/api/plane/license/api/views/admin.py
index aa5ed368032..80292a978f8 100644
--- a/apps/api/plane/license/api/views/admin.py
+++ b/apps/api/plane/license/api/views/admin.py
@@ -126,7 +126,7 @@ def post(self, request):
         first_name = request.POST.get("first_name", False)
         last_name = request.POST.get("last_name", "")
         company_name = request.POST.get("company_name", "")
-        is_telemetry_enabled = request.POST.get("is_telemetry_enabled", True)
+        is_telemetry_enabled = str(request.POST.get("is_telemetry_enabled", True)).lower() in {"1", "true"}
 
         # return error if the email and password is not present
         if not email or not password or not first_name:
diff --git a/apps/api/plane/tests/contract/app/test_instance_admin.py b/apps/api/plane/tests/contract/app/test_instance_admin.py
new file mode 100644
index 00000000000..8b57bce4a1b
--- /dev/null
+++ b/apps/api/plane/tests/contract/app/test_instance_admin.py
@@ -0,0 +1,51 @@
+# Copyright (c) 2023-present Plane Software, Inc. and contributors
+# SPDX-License-Identifier: AGPL-3.0-only
+# See the LICENSE file for details.
+
+import uuid
+
+import pytest
+from django.utils import timezone
+
+from plane.db.models import User
+from plane.license.models import Instance, InstanceAdmin
+
+
+@pytest.mark.contract
+class TestInstanceAdminSignUp:
+    """Contract tests for the first-run instance administrator setup."""
+
+    @pytest.mark.django_db
+    @pytest.mark.parametrize(
+        ("form_value", "expected_value"),
+        [("false", False), ("true", True), ("False", False), ("True", True), ("1", True)],
+    )
+    def test_telemetry_form_value_is_coerced_to_boolean(self, client, form_value, expected_value):
+        """Form-encoded telemetry values must not interrupt instance setup."""
+        instance = Instance.objects.create(
+            instance_name="Test Instance",
+            instance_id=str(uuid.uuid4()),
+            current_version="1.0.0",
+            domain="http://localhost:8000",
+            last_checked_at=timezone.now(),
+        )
+        response = client.post(
+            "/api/instances/admins/sign-up/",
+            {
+                "email": "admin@plane.so",
+                "password": "vB9!qZ2@Lm7#Rx4$",
+                "first_name": "Admin",
+                "is_telemetry_enabled": form_value,
+            },
+            follow=False,
+            HTTP_USER_AGENT="Mozilla/5.0",
+        )
+
+        assert response.status_code == 302
+        assert response.url.endswith("/general/")
+
+        instance.refresh_from_db()
+        assert instance.is_setup_done is True
+        assert instance.is_telemetry_enabled is expected_value
+        assert User.objects.filter(email="admin@plane.so").exists()
+        assert InstanceAdmin.objects.filter(instance=instance).exists()