Copyrighted material. Have the developer agree in the contract to obtain permission to use any copyrighted material, such as music or photos, and warrant that all other work is original and doesn't infringe on the copyrights of others.
Hidden fees. Some developers offer low initial fees but raise their prices for updates. Address that early on in the contractual process or you could be at the developer's mercy. If the developer hosts the site, the monthly fee agreed to in the contract might include a certain number of updates or changes. Make sure the server hosting the site has enough bandwidth to carry expected traffic.
Who's the host? While it's common for designers to host the sites they develop, you may not want to keep your site on their server forever. It's important to negotiate separate contracts, one for developing and one for hosting. Make sure the hosting contract addresses price increases as well as the costs of updates and additional bandwidth.
Who's in control? Include a provision that the client controls all content on the Web site. Otherwise, for example, the developer could put in banner ads for XXX-rated Web sites.
Security. What security will the developer include to guard against hackers? Who will have access to your customers' credit card information? Is the site host free to sell customer names garnered from e-mail communications to other businesses? Any reputable service provider carries insurance, so ask for a provision indemnifying your business in case of security breaches.
Contact a lawyer who has experience in this area. Have the lawyer help you draw up the contract or modify the one offered by the developer. The better you plan in advance the more likely the relationship will be successful.