Photographers, Designers, Website Builders, Audio Engineers, and anyone else who does creative work for a living, if you don't use contracts please take 40 minutes to watch this video. The audience is designers, but the principles apply to any small business. (In case you can't tell from the title, there is "Not Safe For Work" language involved.)
There will always be problem people out there, but having a contract will help prevent stuff like this:
If your creative work is your business, treat it accordingly.