Equipment cut by northern contract (4)
I believe the answer is:
knit
'contract' is the definition.
(I've seen this before)
'equipment cut by northern' is the wordplay.
'equipment' becomes 'kit' (kit is a kind of equipment).
'cut by' is an insertion indicator (some letters cut into others).
'northern' becomes 'n' (abbreviation e.g. N. Ireland).
'kit' going around 'n' is 'KNIT'.
(Other definitions for knit that I've seen before include "Furrow" , "Bind together" , "Arrears" , "get together" , "Work with wool and needles" .)