Hiring a Contractor- what steps do I need to take?

[Peter K.]

After receiving a quote from a contractor to fix up the house, what steps do I need to take? Do I have to make a legal document on the agreed specifics? How is the payment work, I heard you pay a little up front, middle, then after it is all completed. How do I cover myself in the event the contractor does the work poorly or does not do the work at all (or not in a timely manner)? Any tips or advice would be great!