In most CRM systems, the term contact designates an individual who has purchased your product or service or a company representative responsible for purchasing. The difference between a contact and a lead is that leads are POTENTAL clients, whereas contacts are usually existing ones. Please note that in telemarketing terms 'contact' and 'lead' are used differently than in traditional CRM systems. There the term contact means cold lead and those who expressed interest in trying or purchasing the product (warm leads) are called leads.
Contacts could be imported into CRM, added manually or converted from leads that have decided to purchase the product. Contacts are usually associated with companies (accounts) and deals (opportunities).