A contract is a Standard way of describing way a service can do. In the real world contract is an agreement between two or more parties about doing service or some other things. Similarly in WCF it is the agreement between the Service and Clients, through which message can be passed to and from service endpoints.
Service runtime define the behavior of the service. we can achieve through puts, reliability and performance using various WCF Service behavior techniques and handling errors. Most application differs widely in their scalability and performance strategies. WCF service behaviors provide various possible ways to configure key run time behaviors.
This layer defines what kind of formats and data exchange patterns can be used during service communication, this communication are happening through channels. Normally the channels are used to send and receive messages to and from the service endpoint. There are two parts of Channels
1) Transport Channel
2) Protocol Channel
Activation and Hosting
Once WCF service is ready to make it available to outside world service can be hosted in following types
1) In IIS
2) As Windows Activation Service
3) Self Hosting
4) Windows service