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In this video, Matthew explains how to create a plumbing contract using legal templates. To start, viewers should click the link provided to access legaltemplates.net. Once there, they should navigate to "Business Forms" and use the search function to find "Plumbing Contract" and "Plumbing Invoice." After selecting the plumbing contract, users can create a document by entering the service transaction details, including their name as the service provider, customer information, a description of the services provided, and the project's price. It's important to specify the exact cost, especially when dealing with multiple projects.