We would always recommend you have a contract with your builder, projects can take place over many months so you must write everything down. A good contract can reduce the chance of confusion or disagreement and provides peace of mind for you and your builder.
Undertaking building work in the absence of a building contract leaves you at risk because there isn’t a formal agreement around what is in and out of scope, how much the work will cost and how payments will be made, start and completion dates, who is responsible for obtaining and paying for various consents and fees (such as planning permission and building control approval) and critically whether the correct insurance policies are in place before work starts.
A good contract should not be confusing either, the FMB or the Home Builders Alliance have guides and contract templates.
Have you undertaken building work without a contract in place?