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A photo booth contract is a legal document that regulates the rental of portable photo booths, which capture snapshots in a confined space and produce instant photos. These booths remain popular at events like weddings and parties, despite the prevalence of smartphone cameras. The video tutorial emphasizes the importance of using contracts whenever leasing a photo booth, particularly for operators of photo booth companies. It highlights the necessity of these agreements to ensure clear terms between the rental provider and clients. Additionally, the presenter invites viewers to watch till the end for a link to a customizable photo booth contract template available online.