What is contract testing for microservices?

Contract testing verifies service integrations by testing against agreed contracts. Consumer-Driven Contracts (CDC): consumers define expectations, providers verify they meet them. Tools: Pact (most popular), Spring Cloud Contract. Process: consumer writes contract, generates mock for consumer tests, provider runs contract tests. Benefits: fast feedback, avoids end-to-end tests, detects breaking changes early. Challenges: contract evolution, multiple consumers. Compare to: integration tests (slower, environment-dependent), schema validation (less complete). Essential for microservices.