This paper presents a cell-based smoothed finite element method (CS-FEM) for solving two-dimensional contact problems with the bi-potential formulation. The contact force and the relative displacement are coupled with each other and solved by Uzawa algorithm. Three contact states are investigated accurately. The CS-FEM is performed with six different kinds of smoothing domains which are constructed by dividing the background element into different regions. Three numerical examples are presented to verify the accuracy of the method. The effect of the friction coefficient for the contact are also investigated. All solutions agree well with reference values. The results produced by the CS-FEM are more accurate than those of the traditional FEM. Besides, the CS-FEM can provide both upper bound and lower bound solutions for the strain energy while using different smoothing domains.