Any business that provides a service needs to let the customer know what to expect, what your liable for, and what their liable for. You could tell them all of that during a consultation or on the phone, but in most states, unless you have it in writing, you can't really defend yourself if something goes wrong and it's not your fault.
A good contract has a few key things: information about the deposit or retainer fee, warnings about possible allergens, delivery information, and decorative details.
Deposits are usually used as security or as a partial payment for a service or product. Deposits are useful because they tell you, the business owner, that the client is serious about utilizing your skills. They are also good for splitting the cost of a cake, especially if it's a large order. However, legally speaking for certain states, deposits can be refunded if the contract is voided for some reason, whether it be on the client's part or yours. You may add the term "non-refundable" before "deposit." That way you are compensated for your time and effort in planning and possibly starting the cake even if they decide to cancel or something happens. Contracts also may not be "official" until notarized by a judge, again, only in some states. Instead of "non-refundable deposit," you may re-word your contract to say "retainer fee," which, in most states, is automatically non-refundable. A retainer fee, unlike a deposit, ensures you, the service provider, will perform the service agreed upon. Another difference between a deposit and a retainer fee is that a deposit is most commonly used as a partial payment. A retainer doesn't have to be part of the cost of the cake; it can be its own fee, along with taxes, etc.
Make certain that you inform the customer of what types of payments your are able to receive. If you only take cash, put that in your contract. If you can take credit cards, specify which ones (Mastercard, Visa, etc.). Also include dates or time limits for receiving payments. If consultations are given, require a deposit before or after the appointment to ensure your time is not wasted. Specify when the final payment is due, preferably a few days or a week prior to the event. Brides don't want to worry about paying for the wedding cake while getting ready to walk down the aisle.
When it comes to allergies, it's pretty difficult to accommodate every possible allergen because every person is different, and there are over 7 billion people in the world. The most common allergens are eggs and tree nuts, while gluten allergies are also on the rise. If you don't want to take the time to sterilize everything that could have possibly come in contact with those things, order all your ingredients from specialty companies that don't process nuts, and have the state verify and approve your bakery/home for being allergy-free, be sure to include in your contract that anything and everything in your bakery/home may have come in contact with nuts, milk, gluten, and fruit, and guarantee that the client reads it and acknowledges it.
If you or a hired person delivers your cakes/products, your contract should include what to expect when the product is being delivered. The client should be informed that any damage done to the product during transportation due to poor road conditions or accidents is just one of those unavoidable things, and that you or your delivery person is not liable. To help avoid any complications, have the client outline a specific route for you, or at least let you know of any construction or road hazards near the event location. Bringing some basic tools along, as well as any extra decorative pieces may come in handy in case of excessive jarring from bumpy roads, or melting due to heat and humidity. Also, if you know you're going to be transporting a large cake, construct the cake to be able to withstand transportation. Don't skimp out on the materials that support the whole cake.
Decorative details cover a wide range of things that could go wrong. For example, the colors purple and blue tend to fade in sunlight, or they can bleed into surrounding areas if used in frosting such as buttercream. Gumpaste and fondant can also be problematic in environments with excessive humidity, so it's good to have extras in cases of drooping or melting. Include all of these possible occurrences in your contract so your client knows what to expect before deciding on a design. Brides commonly desire fresh flowers for their wedding cakes, but unless you can insert them into the cake properly, opt for sugar flowers. They last longer, too, which is a good selling point. If your bride chooses to go for fresh, your contract needs to include that the responsibility for the flowers' food safety lies with the florist and not you, the decorator. Some florists will work with decorators to ensure food-safe flowers, so it's good to talk to florists before offering fresh flowers for your cakes.
Spring and summer are popular seasons for having weddings or outdoor parties, which is a big problem for cake. Inform your client that most cakes will melt in the sun, or even if they're in the shade. Your contract should state that you can't control how the cake will hold up in an outdoor environment, and that to (almost) guarantee the integrity of the cake it should be kept in a cool, dry area.
I've only touched on a few things to include in your contract. There are many more things that could be listed, but it's nearly impossible to think of everything that could happen. Keep your contract saved on you computer as a word or text file so it can be easily fixed when something else comes to mind. You can also find example contracts online, or you could hire a lawyer to cover all of your bases. Contracts are hugely important to your growing business, and can keep you from running into trouble in case something goes wrong. Keep in mind: it only counts if you get it in writing.