TOPIC: Paying for contracts

Hello all,
I will like to ask what point contracts are paid for please. In the procurement KA calculations, it seems fee buyers are expected to pay seller,under any type of contract chosen is determined after the job has been executed(otherwise,how come there is actual cost). However,there are times in real life when for instsnce, one hears of a contractor not completing work, even though he has been paid for the full contract. What contract type could this be please?