Based on the former research results of the influence of contact failure in ideal and unmatched circuits, this paper further studies theoretically the effects of contact failure on the digital signal transmission in the lossy circuits, which may happen widely in practical applications. Experiences show that even in high-quality lines, losses deform the voltage and current wave shapes owing to their effects on the amplitude of the various waves making up the over-all line voltage and current. Although the derivations show that the effects of contact failure in the lossy circuits on the signal transmission are quite complicated. The probability of occurrence of error codes can be increased significantly. Based on the former research results of the influence of contact failure in ideal and unmatched circuits, this paper further studies theoretically the effects of contact failure on the digital signal transmission in the lossy circuits, which may happen widely in practical applications. Experiences show that even in high-quality lines, losses deform the voltage and current wave shapes due to their effects on the amplitude of the various waves making up the over-all line voltage and current. Although the derivations show that the effects of contact failure in the lossy circuits on the signal transmission are quite complicated. The probability of occurrence of error codes can be greatly significantly.