This is for the protection of not only the buyer, but the seller as well. A contract is no insurance that a breeder will stand behind the dogs he sells, but it is a good starting point on which to base a long-term relationship.
Unhappy clients are the worst advertisement anyone can have, whatever the business.
If a breeder is selling puppies without any written contract or guarantees whatsoever, run, don't walk to the nearest exit. Here is a sample of a Pet Puppy Contract. All images and written material on this site are my property and may not be used without my express written permission.