Avoid Confusion - Get it in Writing

A written contract, spelling out all the details, should always be used, even on small projects. Avoid contractors who refuse to put it in writing. Keep in mind, any promises that the contractor makes will be difficult to enforce unless they are in writing.
The contract should contain the full name, street address and phone number of the contractor as well as the home owner. It should also have an agreed upon price, complete description of the work to be done, and materials (grades and type) to be used, the starting and completion dates, clean up after the work is finished and the payment schedule.

• Never sign a contract with blanks to be filled in later. 
• Never pay a remodeler or contractor the entire cost of the work up front. On remodeling projects, never pay more than one-third down. 
• Never release the final payment until the project is completed according to the contract. You should also have proof that all suppliers, employees and subcontractors have been paid by the contractor. 

Remember that changes cost money, especially if you decide to make changes after the work begins. To avoid misunderstandings, make sure that your agreement with the contractor, concerning both the changes and costs, are put in writing and added to the original contract. Even if you follow these guidelines, problems may arise. Take time to talk with your contractor about your project and try to work out any disagreements.

Link: http://tn.gov/commerce/boards/contractors/index.shtml