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Construction contracts are agreements between two parties, typically involving an exchange of money for services, such as building a house. While the simplest contract can be a verbal agreement, it is legally binding but difficult to prove in case of disputes. Therefore, it is crucial to document everything in writing to avoid potential issues. The speaker shares a personal experience from the first six months of their business, highlighting a costly lesson where the lack of a written contract resulted in a loss of around three thousand dollars. This incident emphasizes the importance of formalizing agreements to protect against financial loss.
