Dear Sandeep,
For this type of activity, you need to have proper legal agreement. You need to make a list of the services that service provider needs to provide, where he will provide, how he will provide, when he will provide, how hus quality of work will be measured, how his invoice will be processed and what will be the payment terms. In addition to this, you need to anticipate the communication requirements between both of you and you need to place as appendix the format of the various reports and returns.
Your attempt should be to make the agreement as foolproof as possible. This will help you in avoiding the disputes in future.
Thanks,
Dinesh Divekar