This.

Too many people allow themselves to be taken advantage of in the freelance world because they don't treat it like a business. You think when a larger agency like Huge books a gig for a Fortune 500 company they don't have a cancellation clause? In their case, that could mean they've already staffed up and turned away new/competing clients to serve the business. Tons of money lost.

It's the same with you as a solo player. When I first started out I thought I had a 9 month retainer agreement signed with a smaller shop I had worked with in the past. We signed on the dotted line and I declined 2 promising gigs because I thought I'd be booked. Well surprise surprise, they backed out before the gig even began (they lost a client), and I only had requested a two week cancellation fee. The gigs I had turned down would have provided above-rate work for 5 months. Lesson Learned.

Always include painful cancellation fees in your contracts. Avoid gigs with subcontracting companies like Creative Circle and Aquent because not only do they leech 50% off your rate, but there's usually no way to get a cancellation clause with them either (they of course get one but you don't).

...And please for those just starting out, DO NOT calculate your rate based on your full-time salary. You will always lose. It should be at least 2-3X that. As Ivo said, shit can happen, and as I've found, it inevitably WILL happen and probably 25-50% of the time (not necessarily lawsuits but non-paying or late-paying clients, gigs not lasting as long as you'd thought, disputes over hours, projects going over budget, etc. etc.).