A statement of work, routinely employed in project management, defines the project-specific activities, the deliverables and their respective timelines, all of which form a contractual obligation on the vendor in providing services to the client.
It defines the scope of the work required and the time in which it is to be performed. A well-defined statement of work is extremely important to the successful completion of a project, because it is the only place the two sides’ understanding of "done" is written down.
It is normally an annexure to a master services agreement, which carries the payment terms, the liability position, the intellectual property clause and how the relationship ends. Where there is no master agreement behind it, the statement of work is quietly doing the job of the whole contract without any of those, which is worth knowing before the project starts rather than after it goes wrong.