What is a social contract?  It is basically an agreement between the government and the people that live within the government.  People give up part of their inherent rights, i.e. to murder, steal, falsely advertise and ride bikes on sidewalks because they do not want others to do those very things.  Nobody wants people riding bikes on sidewalks so we all give up the right to do so, so it wont harm pedestrians.  If these atrocities did happen it would lead to a wide spread panic and pandemonium, so it would not appease the general will or lead to societal progression.  The government can only do this efficiently and productively with some centralization, and less individualism.  And by centralizing the government, we can obtain a social contract and thus it suffices the general will.  What is all this gibberish about the general will? Rousseau believes the ultimate goal (you might even want to say end, but I wouldnt) for a government is to appease the general will.  If we want our basic rights protected a social contract and the centralization of the government will occur. Why do we want this?  Because according to Rousseau the state of nature is chaos, and to avoid this, we develop the social contract so no little kids can ride their bikes on the sidewalk. The general will is democratic because people like and want some centralization in their government to protect their basic right, thus it is the will of the people (general will) and since the people voluntarily want a social contract it is democratic, despite the fact it leads to some centralization.  

The major flaw that I see (sadly) is that the social contract isnt truly voluntary.  By living in America, I automatically agree to live by the contract, and its not really fair for me if I dont want to live by it, and dont have the money to move out, you know?  If I am barely making enough to support myself and my family, but hate living here, and dont want to agree to the social contract, there is no way I can really afford to live somewhere lese. So, (once again, thanks to capitalism) the poor are unfairly treated, and almost treated as less of a human, being that they are denied their inherent rights. Alas, its really too bad, I think its one of the better legal/political philosophies.  But, no philosophy is perfect, at least this one is pretty good!  Eventually, Im going to put on an essay about Anarchy (and why it sucks) and this essay will help make sense of it, so yeah. There ya go.