I, however, partially disagree: contractions can be a sub-type of sandhi. The matter at issue would appear to be the extent to which the phonological operations have to be "general" as opposed to having contextual restrictions. I would actually claim that the English examples are directly inflectional, in the sense that you can select between "I am" or "I'm", "will not" or "won't", and "won't" is not synchronically derived from /will+not/. French, however, would be sandhi, i.e. actual vowel deletion.
