[Qwerty]

I see your point, and it makes sense in terms of enforcing the binding nature of contracts. However, wouldn't the penalty for breach of the contract have to appear somewhere within the contract itself?

[Anitius Severinus Boethius]

I would agree, but remember that a contract generally has provisions between the two parties entering the agreement. The State acts as an agent of legitimacy for the contract and is not a party. Thus it has an extra responsibility to enforce the binding nature of the agreement. Otherwise it would just be simple course to leave any binding agreement when the benefits of doing so outweigh the penalties spelled out within the agreement. The State's considerable ability to apply more penalties than stipulated in the contract itself secures the contract to a much greater degree than simple advantage and convienence.