der Pakt
pact
A formal treaty or solemn agreement between two or more parties, states, or people.
Die beiden Länder schlossen einen Nichtangriffspakt.
The two countries concluded a non-aggression pact.

pact
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pact
A formal treaty or solemn agreement between two or more parties, states, or people.
Die beiden Länder schlossen einen Nichtangriffspakt.
The two countries concluded a non-aggression pact.

The most common verb used with 'Pakt' (pact) is 'schließen' (to conclude/make). You can also 'eingehen' (enter into) a pact or 'brechen' (break) an existing pact.
Die beiden Firmen schlossen einen Pakt, um zusammenzuarbeiten.
The two companies made a pact to work together.
The context shows what kind of agreement is meant. In political or economic texts, it refers to formal treaties. In stories, myths, or in a figurative sense, it often means an ominous, secret agreement.
Die EU-Staaten verhandelten über einen neuen Klimapakt.
The EU states negotiated a new climate pact.
The best-known use in the figurative meaning is the fixed expression 'einen Pakt mit dem Teufel schließen' (to make a pact with the devil). This describes a morally questionable agreement for personal advantage.
Für so viel Erfolg muss er einen Pakt mit dem Teufel geschlossen haben.
For that much success, he must have made a pact with the devil.
contract
'der Vertrag' and 'der Pakt' can both mean a firm agreement between several sides. 'der Vertrag' is the normal word for legally binding agreements, for example in work, purchases, or renting. 'der Pakt' sounds more solemn, political, or dramatic. It is often used for states, large groups, or figuratively for a secret or ominous agreement. Learners may confuse the words because both can sound official. In everyday life, 'Vertrag' is almost always more natural. 'Pakt' only fits when the agreement sounds especially strong, political, or deliberately dramatic.

Die zwei Länder schließen einen Pakt, um gemeinsam die Grenze zu schützen.
The two countries make a pact to protect the border together.
Ich brauche den Vertrag vor dem Gespräch noch einmal als Kopie.
I need another copy of the contract before the meeting.