Contingency sinply means that; for something to happen, something else has to happen:
When you have a Loan Contingency, you are saying that if your Loan does not come through, you are no longer obligated to buy the house.
When you have an Appraisal Contingency, you are saying that the Appraisal has to be high enough to cover the Bank loan, (the Bank will only loan 80% of the Appraised Value: If the Appraisal isn't high enough, you are not forced to continue with the deal.
When you have an Inspection Contingency, and there are things uncovered, Termites, Repairs, Foundation problems, etc.: In that case you will have three choices; accept the problems and proceed with the purchase, or, negotiate some or all of the repairs, or, walk away.
These would be the 3 most common.
Your Realtor can guide. you.
Good luck and may God bless