I use
this for contracts. It's covered everything I've needed so far for contracts with clients, NDAs, pre-work agreements etc making it pretty good value. Pick a situation and there is most likely a contract in the pack for it. Fill in the blanks (your name, their name etc) and you have a professional contract. There's also some useful project planning, estimate, and proposal stuff available on there that are really useful in presenting a professional image to potential clients.
Comes complete with US, UK and Australian versions if you buy the Pro-Pack (which is what I went with) and I think you can break the cost down quite a bit by just buying individual components.
I'd stick with paper though. Get it signed and faxed back to you and it's legally binding.