It can be used to command, as in "Cactus 1354, contact approach with that request." Its real value is as a procedure. Most controllers are familiar with the contact approach but often hesitate to even recal the particulars. It is like a visual approach, except there must be a published IAP at the airport and the pilot must request the contact approach. You need not have the airport in sight, just one mile is visibility. You're still IFR mind you, even though you might be sucking sparrows from their nests. A contact approach has no final approach course, no FAF, no MAP, or missed approach procedure. Once cleared, all terrain clearance is your responsibility. "Cactus 1354 cleared contact approach, radar service terminated, change to advisory frequency approved, report survival, er, cancellation. Godspeed."
References: 7110.65 (Controllers bible)7-4-6