No, contracts are useful even if you trust the other party intimately, because they spell out, in writing, exactly what is expected of each party. Believe it or not, sometimes disputes arise even among people who had the best intentions.

They also allow you to continue to do business even if the other company changes hands.

I think the point you're trying to make is that if you already don't trust someone, a contract is not going to save you. That I can agree with.

The latter is what I meant. I didn't mean don't sign contracts. I meant don't do business with scum.