Cell dispersion from a confined area is fundamental in a number of biological processes, including cancer metastasis. To date, a quantitative understanding of the interplay of single-cell motility, cell proliferation, and intercellular contacts remains elusive. In particular, the role of E- and N-cadherin junctions, central components of intercellular contacts, is still controversial. Combining theoretical modeling with in vitro observations, we investigate the collective spreading behavior of colonies of human cancer cells (T24). The spreading of these colonies is driven by stochastic single-cell migration with frequent transient cell-cell contacts. We find that inhibition of E- and N-cadherin junctions decreases colony spreading and average spreading velocities, without affecting the strength of correlations in spreading velocities of neighboring cells. Based on a biophysical simulation model for cell migration, we show that the behavioral changes upon disruption of these junctions can be explained by reduced repulsive excluded volume interactions between cells. This suggests that in cancer cell migration, cadherin-based intercellular contacts sharpen cell boundaries leading to repulsive rather than cohesive interactions between cells, thereby promoting efficient cell spreading during collective migration.