Contracts are a way to define the types of service agreement that an organization might enter into with a customer. Contracts, when used with cases, can be referenced in order to see if the service being performed is in line with the agreed upon terms of the contract.
Race2Win Insurance Company has entered into a service agreement with one of its clients to provide up to 40 hours of support every week for the next month. The terms of the service are that any case created will be worked on within 24 hours and, if it's a high priority item, the case will be worked on within 1 hour. Race2Win can leverage Microsoft Dynamics CRM contract functionality to help track these contract obligations. Race2Win can tie contracts to cases as they work on them, to make sure that the hours are used appropriately.
Contracts in Dynamics CRM consist of contract templates, which are used to create contracts, and then each contact can have one or more contract lines.