I have recently signed an offer letter for a faculty position.This is not a permanent position. One of the required documents in the offer letter was the names of referees. As far as I know my referees have not been asked for letter of recommendations yet. I am confused about why they asked me to sign the offer letter, whereas they have not contacted my referees in advance.
I haven't seen it before in universities, but certain corporate firms use conditional offer letters where the terms of the offer may stipulate that it is subject to referee checks, security checks, work-history checks, checks of educational credentials, medical tests, drug tests, etc. In such cases, the terms of the offer will usually specify that you agree to assist them with conducting these checks, and if the results of the checks come back unsatisfactory (or if you fail to provide them the required information/permissions to conduct the checks), your offer of employment never materialises. Firms do this partly as a time-saver and partly to try to "lock in" favoured candidates while they conduct pre-employment checks.
I haven't seen this from a university before, since they usually take their sweet time with academic recruitment anyway, so they usually conduct referee checks prior to offer. Nevertheless, universities have become highly corporatised, and it is not particularly surprising to see them using this mode of offer. You should look at the exact terms of your offer letter to see what you are obligated to do and what obligations the university has. (Ideally, you should have had a good look at the terms prior to signing!)
The legal status of conditional employment offers is quite a complicated field. From a purely contractual point of view, firms can make conditional offers and if you fail to meet the conditions then the stipulated outcome does not occur. However, these contracts are also impacted by employment law and principles of estoppel. In particular, in some situations where the final offer of employment does not materialise, the offering firm can be liable if a prospective employee relies on a conditional offer to their detriment, such as by quitting their existing job or moving to a new location for their expected position. Here is an introductory article about the legal status of conditional employment offers, though it pertains to the legal jurisdiction in New Jersey. Employment law differs over different jurisdictions, so if you need legal assistance understanding the implications of your offer letter, you will need to consult a lawyer in your jurisdication.