This is an agreement with an individual worker or external company to provide services on a specific task, (e.g. an electrician, delivery driver). This type of contract is also signed between a contractor or a freelancer with an organisation.
The main advantage of having a contract for service is mainly the fact that the organisation is not liable for the contractors holidays and does not have to spend money on offering employee benefits; therefore this contract can be ended at any time without any restraints. This is therefore one of the reasons why most online based organisations employ their staff on a freelance basis in order to avoid employee related costs.