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In the video tutorial, Matthew explains the process of creating a release of liability form. He guides viewers to legal templates online, specifically business forms, and suggests using a search engine to find the release of liability form waiver. The form can be customized with details such as the releaser's name and address, claims description, payment method, amount, governing state, and witness or notary. It is important to select the appropriate type of release, such as general release or car accident activity waiver.