In Dynamics CRM 2011, you can only invoice contacts that are in a draft state. After that draft contract has been activated and invoiced it becomes read only and you can no longer edit it. You would only activate and invoice a contract after the customer has confirmed/agreed to the terms of the contract. Using our previous example of the washing machine repair contract you would only invoice the contract once that customer has agreed to it/signed the written contract.
NOTE: When you invoice a contract no actual invoice is created.
So continuing on with the example of the ...