There are generally two types of contracts.

Project based. You are hired for a project or to ease temporal manpower shortage. Contract period usually 12 months or shorter. Such contracts will cease on end date. Unless project extended and they seek permission to extend your contract. Of course if you perform well they may consider you for a different perm position if the organisation happens to be hiring. But you still have to compete with other candidates.

Contract as an entry point for perm convert. Usually one or two year. If you do well you will be converted to perm. If you are borderline they extend your contract for further evaluation. If you are not performing they can wait for contract to lapse or even give notice and ask you to go.