I had a situation once, which involved having a coworker install new wood siding on my garage. I thought it would be a fairly simple arrangement. We agreed on a price, and a completion date. He was to be paid when the job was finished. The problem arose when I came home one day to see the new siding on my garage. What had happened was that the garage wasn't level, and rather than leveling the siding with the environment, my carpenter friend applied the siding in accordance with the structural lines of the garage. I'm not kidding when I say that the garage looked like a ship in the process of sinking.
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Because we had simply agreed to a siding installation, my friend insisted that he had fulfilled his part of the bargain. I bit down hard on my pride and cut him a check, then I stripped the siding off of the garage and reinstalled it myself. In retrospect, a contract would have specified that the work would be done correctly and in a "workmanlike manner." I have not made any business agreements without signed, written terms, since that one hard earned lesson.