We first discuss a large set of evolutionary calculations of close binaries with a B-type primary at birth and with a period such that the Roche lobe overflow starts during the core hydrogen burning phase of the primary (intermediate mass and massive case A binaries). The evolution of both components is followed simultaneously allowing us to check for the occurrence of contact binaries. We consider various models to treat a contact system and the influence of these models on the predicted Algol-type system population is investigated. We critically discuss the available observations of Algol-type binaries with a B-type primary at birth. Comparing these observations with the predictions allows us to put constraints on the contact star physics. We find that mass transfer in Algols is most probably not conservative, that contact during this phase does not necessarily lead to a merger, and that angular momentum loss must be moderate.