There are various types of construction contracts that you can have for a single project. Usually, the contract contains information about things such as the quality of work or materials expected, specifications for the project and the timeline for it. Payment and other provisions are typically also included.
Before you sign any contract with a new contractor, you should consider negotiating. As a potential client, you have the upper hand in some ways. It's up to you to decide whether or not to accept the builder's bid, and you can dictate some terms of the contract.
Once you're presented with a finalized contract, it's a good idea to take it to your attorney. You don't want to sign anything until you're happy with the agreement and the situations in which you can walk away without having to pay the contractor. You should also have terms under which you can release the contractor from the agreement and find someone new to work with -- such as if the contractor misses deadlines or doesn't show up for the job.
Both parties are usually closely involved in the negotiation of the contract, and it's necessary for both sides to have their attorneys on hand throughout the process. You want to make sure that the contract is fair to you and that it does not put you at a disadvantage during the construction process. Your rights and money should both be protected by the contract so you know that you'll get what you expect or else be able to seek the necessary repairs or compensation.