A formal agreement between individuals or parties. "The country negotiated a trade pact with the US"
Synonyms: agreement, protocol, deal, contract ~ Oxford Dictionaries
Pact is a contract testing tool. Contract testing is a way to ensure that services (such as an API provider and a client) can communicate with each other. Without contract testing, the only way to know that services can communicate is by using expensive and brittle integration tests.
Do you set your house on fire to test your smoke alarm? No, you test the contract it holds with your ears by using the testing button. Pact provides that testing button for your code, allowing you to safely confirm that your applications will work together without having to deploy the world first.
Contract testing is immediately applicable anywhere where you have two services that need to communicate - such as an API client and a web front-end. Although a single client and a single service is a common use case, contract testing really shines in an environment with many services (as is common for a microservice architecture). Having well-formed contract tests makes it easy for developers to avoid version hell. Contract testing is the killer app for microservice development and deployment.
In general, a contract is between a consumer (for example, a client that wants to receive some data) and a provider (for example, an API on a server that provides the data the client needs). In microservice architectures, the traditional terms client and server are not always appropriate -- for example, when communication is achieved through message queues. For this reason, we stick to consumer and provider in this documentation.
Pact is a consumer-driven contract testing tool. This means the contract is written as part of the consumer tests. A major advantage of this pattern is that only parts of the communication that are actually used by the consumer(s) get tested. This in turn means that any provider behaviour not used by current consumers is free to change without breaking tests.
Unlike a schema or specification (eg. OAS), which is a static artifact that describes all possible states of a resource, a Pact contract is enforced by executing a collection of test cases, each of which describes a single concrete request/response pair - Pact is, in effect, "contract by example".
To learn more, read how a pact test works.