Contracts are necessary evils - fact.
Contracts will differ and should differ from business to business - fact. Someone mentioned about an MOU which covers pre-contract activities. I have never used a MOU as I limit what, where and how much time I spend before my contract is signed and the deposit is forked over. You should be in control of this process - not the potential client. There are potential clients, and we all have run into them, that have no business getting a Web site.