Often times as an attorney, I'm approached by individuals who want to enter into contracts with people in order to make them follow an agreement. I have some good and some bad news for those people: a contract may assist you in ensuring that expectations are met, but if your partner, client, or employee is crazy, your contract won't fix it. 

A contract provides three things of value to small business owners if properly prepared:

1. Clear expectations, 
2. A course of action if things don't go smoothly, and
3. Evidence for legal action if needed.

I add the If properly prepared caveat because it is so common for individuals to simply use an online template without adapting it to fit their particular needs. The result: a contract that has nothing to do with your true expectations, an unrealistic plan for when disagreements and mishaps arise, and evidence that works against you.

However, these three things won't matter if you enter into a contract with a CRAZY person. They won't care about your contract, they are probably broke, and they won't pay you your money. The contract will do little to save you from incompetence. 

That's my two cents.