Whenever a contractor receives a contract, a separate account is created to bring together every cost related to a particular contract. Each contract also receives a serial number, which is then referred to as the contract account. Every expense incurred during the contract, such as the cost of sub-contracts, materials, wages, etc., is debited to the contract account.
In the crypto space, a contract account is referred to as an account that holds Ether as crypto balance and also has a code associated with it. This code gets executed whenever there’s a transaction or messages received from other contracts. These codes, upon execution, are also capable of performing arbitrary complex operations. They can also manipulate their own persistent storage which can call other contracts and have their own permanent state.