Contactors have movable contacts in them which are operated by the action of the solenoid that they are attached too. This solenoid is basically an electromagnet with a spring that resets the contacts to the open position when current is removed from the solenoid's coil/windings. When an electrical current is fed through the coil of the solenoid it creates a magnetic field; the force of the field is stronger than the opposing force of the restting spring thus the moving part of the solenoid which has the contacts attached to it, moves down completing the electrical circuit.
Contactors are usually used in cases where the voltages and currents levels to be used are way beyond the capacity of a normal switch. A common example would be as a direct on line starter for a large electrical motor, which usually have large starting current of up to 5-8 times the run current of the motor. It is also important to note that voltage used to energize the contactors coil can be much smaller than the actual voltage be conveyed by the contacts which feed the electrical load.
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