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Construction contracts are agreements between two parties, typically involving the exchange of money for services, such as building a house. The simplest form of a contract can be a verbal agreement, which is legally binding; however, proving the terms of such an agreement can be difficult in case of disputes. Therefore, it's crucial to document everything in writing to avoid misunderstandings. The speaker shares their personal experience of losing approximately $3,000 due to a lack of written contracts within the first six months of their business, emphasizing the importance of formalizing agreements to prevent financial losses.
