Dave, I am sorry to read this has happened to you, but I am going to tell you this now, and this isen't a personal attack so dont take it the wrong way. All of you can take this on board or not its purely down to how you want to run your contracts.
The rule is simple, unless you get it confirmed in WRITING, never ever, take any work as confirmed, unless you have that piece of paper. I don't care about the deposit, that means nothing in any court of law, without a order confirmation or contract. Long gone are the days when people kept their word on a handshake, these agreements don't exist anymore and the quicker people realise this the better for everyone.
Sort your terms and conditions out, and they need to read like a riot act. You need the customer/client to sign them and return them. I am deadly serious about this, if your calling yourself a professional then start behaving like one. You skip over the paperwork, and the **** hits the fan, you wont have a leg to stand on.
Even if you got issued with a letter of intent you would have been covered to a level as stated on it. That means that even if they dont want to proceed with the works, they legally have to pay you for materials/time/works done up to that level.
There are two sides to this business, getting everything in writing and legally binding, and doing the works. You simply cannot these days have one without the other.
Lynn