We didn't have one with our first nanny and it was a HUGE mistake.

You can find a lot with a simple Google search including some templates. We did not call ours a "contract" because it's not like we were going to sue each other over it, but a "work agreement" should spell out, roughly:
1. Schedule--number of agreed upon hours per week, when you expect nanny to arrive, when she can expect to leave, what s/he should do if sick, running late, etc and how you will notify him/her if you're running late.
2. Holidays, vacations, sick leave, PTO--how this will be handled, whether you'll offer guaranteed hours, how and when you'll agree on vacation days/weeks
3. Wages and how you will pay (personal check, etc) and pay frequency (weekly, biweekly, monthly) and whether you plan for an annual raise or bonus
4. General to specific expectations regarding the job--a basic outline of what the nanny will (or won't) do--are you hoping s/he will join play groups and visit new parks and libraries, or more for someone to follow a schedule of activities you have set? Are there deal breakers (ie if the nanny smoked on the job)? Will the nanny be driving? Have you asked for "light housekeeping?"--outline what that would involve and when you think it would be done (ie during naps or whatever)

It can feel silly but we have found it really helped to talk these things through with our nanny and agree on things before the job started (or at the very beginning).

First off it iseems a nanny agreement and yes it helps to keep everyone on the same page. There are many free templates you can use to help write up an agreement, you do not have to spend money for this. I once bought the American to Z contract and so not worth the cost.

Yes! Even if you find a nanny through word of mouth, you want to have a contract that ensures everything you have agreed to is in writing. At best it will simply serve as a reference for each party to remember what was agreed to, and at best it will protect you in the event you need to fire her for cause or you have irreconcilable differences that require you to part ways gracefully.

There are lots of contract templates available online, but many of them are extremely basic, and you really want a comprehensive agreement, so that when inevitable issues come up (snow days??) you aren't forced to negotiate or make a call on the spot, that your nanny didn't necessarily agree to. Try this one:http://www.thechildcarevillage.com/product/nanny-work-agreement/

Use the code ccarev02 to get the download for free!

Best of luck!

I downloaded the one here: http://www.homeworksolutions.com/knowledge-center/do-i-need-a-written-agreement-or-contract-with-my-nanny/

Yes. Always good to have a contract at the very least it makes you spell out your needs as an employer and let's the nanny see what the specifics are. There are tons of sample contracts online. I used this one and amended to my needs.

http://www.yournannydearest.com/contract/

Please do a search, OP. Thanks!

FTM here. If hiring a nanny by word of mouth rather than through an agency, do you need a contract? If yes, suggestions on what to include? Thanks!