Generally, a construction contract refers to the agreement between a contractor and the owner or general contractor. These agreements encompass what is billable for the project and the values that will be billed for each area. This is typically referred to as a schedule of values.
In short, a Contract is a closed/won agreement which defines what will ultimately be billed to a customer as part of the work that will be completed.
Within NetSuite the transaction type used as a Contract is a Sales Order. Because Sales Orders can have applications outside of progress billing (for example, they can also be used to define demand of inventory from a warehouse to a project which can then be fulfilled by warehouse personnel) - it is recommended that a dedicated Sales Order transaction form be created specifically for Contracts.