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Well, the way I see it:
Avoid-K: ability to make contact, i.e. not wiff. Put the ball in play.
Contact: quality of contact, control of BABIP
So, a player with high contact and low avoid-k will wiff a lot, but have high BABIPs (think Michael Bourn). A player with high avoid-k and low contact will barely ever strike out, good contact%, but will tend to have low BABIP (think Marco Scutaro).
Both influence the outcomes of balls in play, and the "type" of outs a player generally makes, influencing the player's Avg and OBP.
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