I would use a privacy policy period. Some will claim Google prefers it, and it is a simple addition. You can find some cut and paste text for it easily enough.

Terms and Conditions would depend on what your site is about.

I also run a contact page on most sites.

No, these are not mandatory.
Contact info is required for contacting the owner.
terms and conditions are the conditions which are to be followed in order to become member on their site.
privacy policy is required to proove that visitors info will be kept secret whether its ip,or there home address

I hear that Google does prefer it, and they might give you a couple points in their ranking formula if you do have them.

However, I have good rankings on many sites, and most of them do not have the Privacy page or TOS.

Not required BUT it's always best to have them especially if you are selling something online... Cheers!

Privacy Policy is good to have. but TOS depends of your website niche. I prefer to see both, it gives your visitor piece of mind when visiting your site. Some people will not agree

If you have AdSense on your web site, it is required that you have a privacy policy that explains that Google is setting a cookie in the visitor's browser:

Google Advertising Cookie and Privacy Policies - AdSense Help

I figure it's worth having that sort of information available - that cookies are being set - to visitors to my sites, even if they don't have AdSense ads.