Shrink from engagement (8)
I believe the answer is:
I believe this is a double definition.
'shrink' is the first definition.
(I know that shrink can be written as contract)
'engagement' is the second definition.
'from' acts as a link.
(Other definitions for contract that I've seen before include "bargain" , "Undertake" , "four spades, perhaps" , "Make smaller" , "Shrink in legal agreement?" .)