If the package.xml is upgraded to API 38.0 then we are receiving the following errors while deploying to a Salesforce Org with Winter 17 i.e API 38.0
1. objects/Contract.object (Contract.Status) -- Error: field integrity exception: unknown (invalid value) (line 979, column 13)
2. objects/DuplicateRecordSet.object -- Error: invalid cross reference id

Thanks,
Srikanth.