Have a look at my sample contract here:
http://www.talkfreelance.com/showthread.php?t=2745

I have a payment sytem of 33% deposit before I commence work, 33% on client acceptance of mockup and the final 34% on completion of project.

Heres part of my cancellation clause:

42. Cancellation
Cancellation of the project at the request of the Client must be made by registered mail. In the event that work is postponed or cancelled at the request of the Client by registered mail, the Developer shall have the right retain the original 33% deposit. In the event this amount is not sufficient to cover the Developer for time ($100 per hour) and expense already invested in the project, additional payment will be due. If additional payment is due, this will be billed to the Client within 10 days of notification via registered mail to stop work. Final payment will be expected under the same terms as listed in Article 24 above.

If your client does not like your work after the 3rd mockup then something must be drastically wrong with the communication. You should always have very full briefings of the project, your client should have been interviewed extensively. After this process you should understand what your clients needs are, and they should have conveyed them properly. You should never get to the point that a client doesn't like at least some aspects of your mockups. If they do like some aspects, then work from there.