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and why I don't use them.
Do you want potential clients to find your site as easily as you've found mine?
An SEO contract covering the work in hand is a nice idea but difficult to establish in practice. Contracts are necessarily based upon sets of mutually agreed upon definitions. The internet is too volatile an environment for any definition to get established. For instance,
I will/will not optimise our site using doorway pages.
Sounds straight-forward till you try getting an industry-wide definition of what a doorway page is. Most people will give a knee-jerk reaction and go "Doorway pages bad!" Others will quite candidly admit that they use them but not in the old, bad way. Some will call them internal doorway pages and say they're different now and a good thing (me, for one, almost all my site would fit this definition - and we know Google likes what I do!). Others will variously call them gateway pages, hallway pages, information pages, printer-friendly pages. And on and on.
The problem with seo contracts is that this is a nascent industry. It's exploding in lots of directions and there aren't really any static reference points.
Except - I'll trust you if you'll trust me. And it mostly works, survival for both parties is maintained by never becoming too exposed. That can lead to trouble.
But you could just as easily (and potentially a great deal more expensively) even if you had an SEO contract!