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Construction contracts are agreements between two parties exchanging services for money, usually needed for building projects. Even verbal agreements can be legally binding, but it's crucial to have everything in writing to prevent disputes. The importance of written contracts was learned the hard way by the speaker in their first six months of business, costing them about $3,000 due to not having a clear written contract. Stick to the rule of always getting everything in writing to avoid potential losses and misunderstandings.