Chapter 9: The Atonement of Jesus Christ, A: God Governs the Universe By Law

There are laws by which this life is governed. These are God's laws pertaining to sin and righteousness. These laws are necessary for us to be happy. Without laws there would be no punishment, but there also would be no reward and we would be neither happy nor sad, just neutral.

There is a law irrevocably decreed in heaven before the foundations of this world, upon which all blessings are predicated - and when we obtain any blessing from God, it is by obedience to that law upon which it is predicated.
D&C 130:20-21

For all who will have a blessing at my hands shall abide the law which was appointed for that blessing, and the conditions thereof, as were instituted from before the foundation of the world.
D&C 132:5

And if ye shall say there is no law, ye shall also say there is no sin, ye shall also say there is no righteousness. ANd if there be no righteousness there be no happiness. And if there be no righteousness nor hapiness there be no punishment no misery. And if these things are not there is no God. And if there is no God we are not, neither the earth; for there could have been no creation of things, enither to act no to be acted upon; wherefore, all things must have vanished away.
2 Nephi 2:13

Sin is the transgression of the law. Everybody in this earth life sins. Thus, we all are fallen and in need of a Savior.

Whosoever committeth sin transgresseth also the law: for sin is the transgression of the law.
1 John 3:4

Therefore to him that knoweth to do good, and doeth it no, to him it is sin.
James 4:17

For all have sinned and come short of the glory of God.
Romans 3:23

For it is expedient that an atonement should be made; for according to the great plan of the Eternal God there must be an atonement made, or else all mankind must unavoidably perish; yea, all are hardened; yea, all are fallen and are lost, and must perish except it be through the atonement which it is expedient should be made.
Alma 34:9

It is necessary that there be a punishment for sin. If there are laws, and there is no punishment for breaking those laws, then the laws aren't really there. Without laws, we are all lost.

Now repentance could not come unto men except there were a punishment, which also was eternal as the life of the soul should be, affixed opposite to the plan of happiness, which was as eternal also as the life of the soul. Now, how could a man repent except he should sin? How could he sin if there was no law? How could there be a law save there was a punishment? . . . But there is a law given, and a punishment affixed, and a repentance granted; which repentance, mercy claimeth; otherwise, justice claimeth the creature and executeth the law, and the law inflicteth the punishment; if not so, the works of justice would be destroyed, and God would cease to be God.
Alma 42:16-17, 22

But if they would not repent, they must suffer even as I.
D&C 19:17