The participation of farmers, industrialization of agriculture, and integration of village and towns, all as the necessities and important parts of the market economy, are working together to keep the economy circle in operation. While contract farming is just one form of this economy system. Started from the late 1980s and early 1990s, contract farming has received great interests from the government, farmers, enterprises, agricultural cooperative organizations, wholesale market and other agencies. Contract farming goes with the tide of the economic development and spreads rapidly throughout the entire country. The investigation conducted by ministry of agriculture in 2002, which covered 11824 industrialized agricultural units of 29 provinces, showed that 8377 (70.9%) were practicing contract system.Although kinds of participants are exerting their effort, contract farming is staggering forward in China. The nature of pursuing interests enables the activity of the participators off the track frequently, which makes the contract farming in irregular and disorder. For example, misfit of the government subject, the weakness of the government supervision, frequent breach of the contract, fulfillment of the contract at the rate of only 20%, the difficulty of solving the dispute, benefits instead of penalty gained by the defaulter, no logical regression of the farmers and enterprises as the discharger, the vague perception about the contract, the disorder during the process of signing and fulfilling the contract, the monopoly and deceit to the farmers and enterprises, etc. This irregularity and disorder discouraged the participators, destroyed reputation of contract farming, and greatly influenced its development process.Many researchers in the area of the agricultural economy realized the importance of contract farming. At the same time, they also observed and felt the embarrassment and predicament of the contract farming experienced in China. They apply the basic theories and analytical methods of the classical and neoclassical economics, institutional and neo-institutional economics, contract economics, and game theory into the contract farming, in order to make the research from many points of view. They analyze the value of contract farming; find the existing problem and the relevant solution; bring out lot of constructive advice and suggestion, and provide the theoretical support for the development of contract farming. Compared with the research overseas, however, we still need further explore this topic. Contract farming, a complicated topic covering a wide range, needs to be analyzed and discussed in multi-dimensions, so as to get a comprehensive analysis into the operational system of the contract farming. That is just where this article comes from.This researches into the contract fanning and its operational system, is mainly conducted from the view of law analysis. And the article applies the research results and