The founding idea of any social contract based on the concept of popular sovereignty is to define the rights and obligations of citizens for the establishment of people’s power over the state and all social domains. Yet, although all democratic constitutions tend to affirm this concept to a greater or lesser extent – perhaps, paradoxically, the Soviet constitution was its most complete embodiment – in their elaboration, the people, nominally cited as sovereign, is systematically excluded from decision-making, such that “popular sovereignty” does not occur in practice. In fact, the real sovereigns are a coalition of economic and political oligarchy, as a privileged caste that – completely cut off from the life of the social majority – confiscates power from the people. This text presents a plea for the establishment of a new social contract in Serbia, which would be formulated in such a way as to guarantee its initial postulate: the sovereignty of the people. Such a social contract should be established on three equally important fundamental principles: socio-economic, juridical and political equality, and the principles of social freedom and solidarity. These components can be realized exclusively through the system of participatory democracy. The paper focuses on the concrete elaboration of the main guidelines of the social contract for Serbia in the 21^st century.