Bennett, you're totally correct regarding enforcing contracts and the difficulties this presents when doing business internationally. However, the contract is still a vital component of alternative methods of recourse.

For example, any time there is a 3rd party involved in the transaction, and a dispute arises, there is the potential to seek resolution through the third party. This holds true if you're utilizing b2b sites such as elance or guru, or even if we're just talking about payment processors such as credit card issuers or payment intermediaries like paypal.

If you have a contract, even though you may not be able to file a lawsuit against some guy in Lithuania who has violated that contract, the contract is your basis for taking an alternate course of action....Such as filing a claim of fraud with the credit card issuer or going thru the 3rd party b2b site to seek recourse. You may not always get your money, or get your money back, but you still have a chance provided you have a contract to hang your complaint on.