A three-state contactor for an electrical system having a battery pack and voltage bus rail includes first and second pairs of electrical terminals. The first pair of terminals is separated by a first circuit gap in a first circuit path extending between the bus rail and an electrode terminal of the battery pack. The second pair of terminals is separated by a second circuit gap in a second circuit path extending between the bus rail and electrode terminal. A contactor arm, in response to a corresponding switch activation signal, translates in an orthogonal direction with respect to its longitudinal axis between a first ON state position, an OFF position, and a second ON position to close the first circuit gap, open both circuit gaps, or close the second circuit gap, respectively. A multi-pack battery system and an electric powertrain may use the contactor.