A contract is an agreement between trading partners. It details how they conduct business transactions.
Contracts are useful when you want a customized process for a specific customer that does not apply to any of your other customers. Or perhaps you have a specific arrangement with a customer that is not the same as the arrangement you have with a second customer. A single trading partner can be associated with more than one contract.
The following figure shows a typical contract negotiation process between two trading partners:
If you use the Advanced Trading Partner options on the Admin Console to create a trading partner profile, you need to add a contract manually.