Evaluating a good contractor bid

[Grant Garbo]

What sort of questions are recommended to ask when evaluating a bid on a job.  I have always heard the rule of 3, but based on my understanding there could be "estimates" as opposed to hard prices.  What is the language to use when negotiating projects with a contractor to ensure that the price doesn't get jacked up just before the job is complete.  

A contract will help in this pursuit, but who does the contract?  Do you have an attorney review the contract?  Is the agreed upon payment set in stone with labor, materials and contractors profit spelt out?  Just looking for some guidance so I don't get taken advantage of in my first renovation project.