As others have said you must have a contract! This protects you and protects the client. Even just from an image stand point you look more professional if you have one. Home daycare unfortunatly can have a bit of a bad reputation sometimes due to unprofessional discount providers setting up shop and providing (excuse my language) shitty service for cheap rates. These providers most often work without contract. A contract is what can help seperate your image from that.

Image aside it's just good protection. I am fairly new to this so my contract is probably not up to snuff compared to the above ladies but I am working on revising it. I also keep my contract fairly short and then have other forms for parents. These are "All about my child", "Medical and Emergency Information" "Transportation Consent form" as well as a lengthly policy booklet for them to keep.