Smart contracts are accounts holding objects on the Ethereum blockchain.
They contain code functions and can interact with other contracts, make decisions, store data, and send ether to others. Contracts are defined by their creators, but their execution, and by extension the services they offer, is provided by the ethereum network itself. They will exist and be executable as long as the whole network exists, and will only disappear if they were programmed to self destruct.
At FundYourselfNow, we use smart contracts to hold funds raised by projects until milestones are reached so that creators are accountable to the backers.