My name is Emma and I am one of the Support Gurus here at Shopify :)
If you are referencing a legal contract in regards to the agreement between yourself as the merchant and your drop-shipper/supplier then that ideally is something you would want to discuss with your legal council to ensure the document is actually legally binding.
As far as when to apply/use a legal document - that can be dependent on your business. Myself coming from a small family business background can say that no matter how small it never hurts to be careful. With that being said I wouldn't see the harm in having your contract set up from the start and down the road as you grow etc. then you can make mutual adjustments to the agreement at that time if need be.
I hope that info is helpful however if there is anything else we can help you with please don't hesitate to reach out to us again as you can always speak with a live Guru: