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If the number is approximate (e.g. 'around six hundred years ago') it should be spelled out. Very large numbers should generally be expressed without using rows of zeros where possible (e.g. $3.5 million instead of $3,500,000). In contracts, the use of both words and numbers is common in order to increase certainty.

It probably comes from the days before the printing press when contracts were handwritten. Then it would have been easy for a scoundrel to alter a number. Spelling out the word too made that harder. Perhaps that is why some people still hand write checks that way.

A simple rule for using numbers in writing is that small numbers ranging from one to ten (or one to nine, depending on the style guide) should generally be spelled out. Larger numbers (i.e., above ten) are written as numerals.